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U.S. stocks advanced, sending the Dow Jones Industrial Average toward the highest level since 2007, as retail sales increased by the most in five months and the Federal Reserve said the jobs market has improved.
Financial, technology and industrial shares had the biggest gains in the Standard & Poor’s 500 Index among 10 groups. Caterpillar Inc. and JPMorgan Chase & Co. (JPM) increased more than 2.2 percent. Apple Inc. (AAPL) jumped 2.1 percent, rallying for a fifth straight day, as Jefferies Group Inc. raised its share-price estimate to $699. The Dow Jones Transportation Average, which is considered a proxy for economic growth, climbed 1.3 percent.
The S&P 500 added 0.9 percent to 1,383.07 at 2:28 p.m. New York time. The Dow advanced 110.35 points, or 0.9 percent, to 13,070.06, the highest on a closing basis since December 2007. Both gauges rose for a fifth day. The Nasdaq Composite Index gained 1 percent to 3,014, the highest level since 2000. (CCMP) About 4.1 billion shares changed hands on U.S. exchanges.
“We’ve seen an improving economic picture,” said Ryan Larson, Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc. His firm oversees $250 billion in assets. “That’s been supported by accommodative monetary policy. Any kind of pullback in stocks should be kept in the context of a larger move higher for equities.”
Benchmark gauges rose as data showed retail sales rose 1.1 percent in February, matching the median forecast of economists surveyed by Bloomberg News. Stocks extended gains as Fed policy makers raised their assessment of the economy as the labor market gathers strength and refrained from new actions to lower borrowing costs.
Stocks also followed global stocks higher as concern about Europe’s debt crisis eased. German investor confidence jumped to a 21-month high. European Central Bank council member Jens Weidmann said policy makers are already discussing ways to withdraw some of the emergency cash they injected into the banking system to fight the sovereign debt crisis.
Today’s gain extended this year’s advance in the S&P 500 to 10 percent. Technology and financial shares surged at least 15 percent as investors bought stocks of companies most-tied to the economy amid signs of rebound at the world’s largest economy.
Nine out of 10 groups in the S&P 500 gained. The Morgan Stanley Cyclical Index jumped 1.9 percent as 29 of its 30 stocks advanced. Caterpillar (CAT), the biggest construction and mining- equipment maker, advanced 2.8 percent to $112. Alcoa Inc. (AA), the largest U.S. aluminum producer, increased 3.7 percent to $10.23. A measure of homebuilders in S&P indexes rose 1.7 percent to the highest level since 2010.
Apple, the world’s biggest technology company, jumped 2.1 percent to a record $563.73. Jefferies raised its share-price estimate by $100. Apple has surged 39 percent this year and its market capitalization last month topped $500 billion for the first time.
The KBW Bank Index (BKX) climbed 1.7 percent as all of its 24 stocks gained. The index yesterday snapped a three-day advance on concern about how banks would perform in Fed stress tests. JPMorgan increased 2.2 percent to $41.43. Bank of America Corp. (BAC) rallied 1.8 percent to $8.13 today.
FactSet Research Systems Inc. (FDS) advanced 9.2 percent to $99.20. The Norwalk, Connecticut-based financial-data supplier reported second-quarter profit and sales that exceeded analysts’ estimates. Bloomberg LP, the parent of Bloomberg News, competes with FactSet.
Urban Outfitters Inc. (URBN) fell 5.5 percent, the most in the S&P 500, to $27.88. The operator of its namesake, Anthropologie and Free People brands reported fourth-quarter earnings that missed the average analyst estimate.
BioCryst (BCRX) Pharmaceuticals Inc. slid 5.4 percent to $5.25. The drugmaker will initiate a process at the U.S. Patent & Trademark Office to correct an “apparent error,” according to a regulatory filing. BioCryst said that a patent for a hepatitis C inhibitor it discovered was issued to Biota Holdings Ltd.
A bad year for American equity trading is getting worse. Shares changing hands on all U.S. exchanges fell 16 percent to 5.23 billion yesterday from March 9, while S&P 500 composite volume slipped 17 percent to 2.17 billion shares, data compiled by Bloomberg show. Those are the lowest daily levels of 2012 and the smallest totals excluding holiday weeks since Bloomberg began tracking the data in 2008.
A rally that has restored more than $3.2 trillion into U.S. equities has failed to lure investors. While the S&P 500 has had its best annual start since 1998, individuals are shunning equities after they were burned in 2011 by Europe’s crisis, said Mark Turner, head of U.S. sales trading at Instinet Inc.
“I don’t think investors are completely convinced,” Turner said in a telephone interview. Volume “was extremely light volume because it was quiet in Europe over the weekend and there was no major headlines coming out of Europe,” he said. “Money has been shifting to bonds out of equities for some time now. There’s a host of different reasons. Take your pick.”
Nasdaq (MVOLQE) composite trading volume slipped 15 percent to 1.34 billion shares, the lowest excluding holidays since Aug. 27, 2007, when it was 1.34 billion shares, data compiled by Bloomberg show. Volume of shares for securities traded on the New York Stock Exchange declined 10 percent to about 644 million shares, the lowest since Feb. 24, Bloomberg data show.
U.S. companies and their executives are selling stocks at 2.2 times the pace of buying, the most since December 2009. About $15.3 billion of shares have been sold by companies and insiders this month, compared with $7.1 billion of purchases, according to TrimTabs Investment Research.
Stock offerings reached $2.7 billion a day last week, the highest level since May, the data show. Simon Property Group Inc. (SPG), the largest U.S. mall owner, announced its first stock offering in almost three years while Internet company Yelp Inc. went public.
“Our supply indicators have turned markedly less favorable in March,” Charles Biderman, chief executive officer at the Sausalito, California-based firm, wrote in a report dated yesterday. “We are not greatly concerned that corporate buying has been unspectacular,” he said. “What worries us more is that new offerings and insiders’ selling have soared.”
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