U.S. stocks rose, giving the Standard & Poor’s 500 Index its biggest weekly rally in 2012, on optimism that weekend discussions among European finance officials may result in a bailout for Spain to shore up its lenders.
Wal-Mart Stores Inc. (WMT:US), JPMorgan Chase & Co. and Intel Corp. (INTC:US) advanced at least 1.8 percent to pace gains among the biggest companies. Facebook Inc. (FB:US), the operator of the world’s largest social network, climbed 3 percent after researcher ComScore Inc. suggested that marketers can use the site effectively to spur purchases. Alpha Natural Resources Inc. (ANR:US) retreated 2.6 percent as the nation’s second-biggest coal producer said it is shutting mines in Kentucky and closing U.S. regional offices.
The S&P 500 advanced 0.8 percent to 1,325.66 at 4 p.m. New York time, reversing an earlier decline of as much as 0.6 percent. It rallied 3.7 percent this week. The Dow Jones Industrial Average increased 93.24 points, or 0.8 percent, to 12,554.20. About 5.8 billion shares changed hands on U.S. exchanges today, or 15 percent below the three-month average.
“The risk-on trade emerged,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama. “There’s more of a conviction that something is going to happen with Spanish banks that’s going to be positive. Anything that could address the situation in a favorable way could have a positive impact.”
European Central Bank Vice President Vitor Constancio said today that a Spanish request is “awaited” and will be “exclusively directed at the recapitalization of banks.” The bid may come as soon as tomorrow when finance ministers hold a conference call, according to a person familiar with the plans who declined to be identified.
Earlier today, U.S. equities joined a global slump as German exports dropped in April for the first time this year as weaker global growth curbed demand. French business confidence and Italian output also declined. The trade deficit in the U.S. narrowed in April as a drop in imports overshadowed the first decline in exports in five months.
“Short-term investors aren’t enamored with risk,” said Lawrence Creatura, who helps oversee $363.6 billion as a Rochester, New York-based fund manager at Federated Investors Inc. “The economic data coming out of Europe just served as a reminder that all is not well yet.”
The S&P 500 rallied this week as China cut interest rates and European Central Bank President Mario Draghi said officials stand ready to act. Most stocks fell yesterday as an early gain fizzled after Federal Reserve Chairman Ben S. Bernanke said the central bank will assess the economy before deciding if more stimulus is needed.
Telephone, financial and technology shares had the biggest gains among 10 groups in the S&P 500 today. Wal-Mart Stores, the world’s largest retailer, rose 3.6 percent to $68.22. Intel, the biggest chipmaker, added 1.8 percent to $26.41. JPMorgan advanced 2.7 percent to $33.68.
Facebook rose 3 percent to $27.10. Companies marketing to Facebook users who have signaled they “like” a business or have mentioned a brand in a post can have a “a statistically significant positive lift on people’s purchasing,” ComScore said in a blog post. The findings counter a Reuters/Ipsos poll earlier this week that showed sagging interest in the site and a minority of users being influenced by advertising when deciding what to buy.
Chesapeake Energy Corp. (CHK:US) rallied 2.9 percent to $18.36. The U.S. energy explorer, which is facing a $22 billion (CHK:US) cash shortfall because of falling natural-gas prices, agreed to sell its pipeline interests to Global Infrastructure Partners for more than $4 billion.
Separately, shareholders rejected the re-election of two directors involved in the internal probe of Chief Executive Officer Aubrey McClendon’s personal finances.
Navistar International Corp. (NAV:US) advanced 18 percent to $28.36. Carl Icahn disclosed he boosted his stake in the maker of International brand trucks.
Quiksilver Inc. (ZQK:US) climbed 12 percent to $2.74. The maker of clothing for skateboarders and surfers climbed after avoiding a wipeout in its European sales. It posted second-quarter revenue growth in constant currency in the region while rivals reported declines.
Alpha Natural Resources dropped 2.6 percent to $9.32. Operations will end at eight mines in Kentucky, including four owned by affiliates and four contract facilities, and production will be cut at others. The moves will reduce thermal-coal shipments by 2 million tons this year and 4 million tons in 2013, Alpha said. About 150 jobs will be eliminated.
NetApp Inc. (NTAP:US) retreated 3.1 percent to $30.33. The seller of hardware and software for storing data was downgraded at Barclays Plc. The share-price estimate is $34.
McDonald’s Corp. (MCD:US) dropped 0.7 percent to $87.75. The world’s largest restaurant chain said sales at stores open at least 13 months rose 3.3 percent globally last month, falling short of analysts’ estimates, as sales declined in Japan and China.
Nasdaq OMX Group Inc. persuaded Kraft Foods Inc. (KFT:US) to move its listing from the New York Stock Exchange, scoring the largest-ever company to switch markets three weeks after it botched Facebook’s initial public offering.
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