BLBG: U.S. Stocks Rise on Factory Orders Before Fed Speakers
U.S. stocks rose, following the Standard & Poor’s 500 Index’s gain yesterday, as U.S. factory orders rose in May and investors awaited comments from Federal Reserve officials.
Zynga Inc. advanced 11 percent after naming a new chief executive officer. Nielsen Holdings NV rose 3.5 percent on being included in the benchmark gauge. DaVita HealthCare Partners Inc. tumbled 4.9 percent after the government proposed reducing payments to dialysis-center operators.
The S&P 500 gained 0.3 percent to 1,619.51 at 10:04 a.m. in New York. The Dow Jones Industrial Average climbed 44.54 points, or 0.3 percent, to 15,019.50. Trading in S&P 500 stocks was 5.2 percent below the 30-day average during this time of day.
“What we’re in is a trend of consolidation, where the market moved up dramatically,” Michael Gibbs, Memphis, Tennessee-based co-head of the equity advisory group at Raymond James, said in a telephone interview. His firm oversees about $413 billion in client assets. “We have a market which is now dealing with some new data point and digesting those gains and the new thought process of Fed tapering.”
The S&P 500 has dropped 3.3 percent since May 21, the day before Fed Chairman Ben S. Bernanke signaled the central bank could scale back asset purchases if the economy improves in line with forecasts. The benchmark equity gauge climbed 0.5 percent yesterday after data showed manufacturing grew faster than forecast in June and construction spending increased. It rallied 13 percent in the first half of the year, the best performance since a 17 percent gain in the first six months of 1998.
Factory Orders
The 2.1 percent gain in factory orders followed a revised 1.3 percent advance the prior month, the Commerce Department reported today in Washington. The median forecast of 61 economists in a Bloomberg survey called for a 2 percent increase.
New York Fed President William C. Dudley speaks on the economy at 12:30 p.m. in Connecticut. Fed Governor Jerome Powell will address a Deutsche Bundesbank reception at 5:45 p.m. in New York about reforming international financial regulations.
Data tomorrow from the ADP Research Institute may indicate American companies increased employment in June. Investors will watch the monthly U.S. labor report later this week for further signs of economic strength. Employers in the U.S. probably created 165,000 jobs in June, almost the same as in the prior month, according to the median forecast of economists in a Bloomberg survey ahead of July 5 figures from the Labor Department. The unemployment rate probably fell to 7.5 percent, matching April’s four-year low.
Earnings Season
Alcoa Inc. will unofficially start the second-quarter earnings season after the market close on July 8, as the biggest U.S. aluminum producer becomes the first company in the Dow to report results. Profits from S&P 500 companies probably grew 2.4 percent, according to analyst estimates compiled by Bloomberg. That’s down from a projected increase of 6.2 percent at the beginning of the quarter.
Zynga jumped 11 percent to $3.42. The maker of social-networking games named Don Mattrick, the former head of Microsoft’s entertainment division, as its new CEO. Mattrick will start July 8, the company said.
Nielsen Holdings, the biggest provider of U.S. television ratings, gained 3.5 percent to $34.44. The company will replace Sprint Nextel Corp. in the S&P 500 after the end of trading July 8, S&P said in a statement.
DaVita HealthCare tumbled 4.9 percent to $115.16. Dialysis-center operators may see U.S. payments reduced 9.4 percent in 2014 under a Medicare proposal. The government will consider phasing reductions over more than a year, the Health and Human Services Department said yesterday in a regulatory filing. The proposal is subject to public comment and may change before taking effect.
Achillion Pharmaceuticals Inc. plunged 22 percent to $6.51. The company said U.S. regulators stopped the clinical trial of one of its drugs for hepatitis C after some patients experienced elevated liver enzymes.
To contact the reporters on this story: Lu Wang in New York at lwang8@bloomberg.net; Inyoung Hwang in New York at ihwang7@bloomberg.net
To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net
