- 21Oct
Oct. 21 (Bloomberg) -- U.S. stocks rose, with benchmark indexes gaining for a second day, as companies from EBay Inc. to Freeport-McMoRan Copper & Gold Inc. increased earnings and sales forecasts while jobless claims decreased.
EBay, the owner of the world’s largest auction site, rallied 7.5 percent and Freeport-McMoRan gained 4 percent. Netflix Inc., the mail-order and online movie-rental service, surged 11 percent after it increased its projections of subscribers.
The Standard & Poor’s 500 Index rose 0.3 percent to 1,181.98 at 9:36 a.m. in New York. The Dow Jones Industrial Average increased 54.79 points, or 0.5 percent, to 11,162.76. Benchmark gauges yesterday surged the most in two weeks as profit at Boeing Co. and Yahoo! Inc. topped projections and speculation grew the Federal Reserve will pump more cash into the economy in a tactic known as quantitative easing.
“Corporate profits have been pretty good,” said Jason Pride, director of investment strategy at Glenmede in Philadelphia, which manages $18 billion. “The latest economic figures show that the jobs market is improving at a slow pace albeit in the right direction. That is consistent with the view of more quantitative easing. Investors are reacting accordingly.”
Fed Speculation
The S&P 500 rose 1.1 percent to 1,178.17 yesterday, maintaining gains after the Fed said in its Beige Book business survey that U.S. economic growth showed little sign of accelerating last month, fueling speculation it will boost purchases of government debt.
Per-share earnings have beaten estimates at 90 of the 104 companies in the S&P 500 that reported since Oct. 7, according to data compiled by Bloomberg.
Initial jobless claims fell by 23,000 to 452,000 in the week ended Oct. 15, Labor Department figures showed. The total number of people receiving unemployment insurance fell, while those getting extended payments rose. The index of U.S. leading indicators probably climbed in September for the third straight month, signaling the recovery will extend into 2011, economists said before reports today.
The Conference Board’s gauge of the outlook for the next three to six months rose 0.3 percent, according to the median estimate of 57 economists surveyed by Bloomberg News.
EBay, Caterpillar
EBay rallied 7.5 percent to $27.58 after the auction site forecast higher-than-estimated sales and earnings. Chief Executive Officer John Donahoe, halfway through a three-year campaign to revive growth, has cut listing fees to lure more sellers and taken steps to make EBay’s Marketplaces commerce site easier to use.
Freeport, the largest publicly traded copper producer, jumped 4 percent to $99.15. The company increased its forecast of copper sales for the full year to 3.85 billion pounds, up from a previous prediction of 3.8 billion. The company also raised its full-year prediction for gold sales 5.6 percent to 1.9 million ounces.
Netflix soared 11 percent to $170.50. Netflix, which calls itself “a streaming company, which also offers DVD-by-mail,” projected fourth-quarter profit of as much as 74 cents a share, beating the average analyst estimate of 70 cents. Netflix also raised its year-end subscriber forecast to as much as 19.7 million from up to 18.5 million.
Xerox Corp. added 2.3 percent to $11.35. The copy-machine and document-management company reported third-quarter profit of 22 cents a share on an adjusted basis as the company continued to benefit from its acquisition of Affiliated Computer Services Inc. Analysts surveyed by Bloomberg had estimated profit of 21 cents on average.
