U.S. stocks rose, with the Standard & Poor’s 500 Index approaching a four-year high, amid better- than-estimated data on consumer confidence and leading indicators and as Apple Inc. (AAPL:US) climbed to a record.
Apple rose 1.9 percent, surpassing $600 billion in market value, after Jefferies & Co. said the company had started production of the iPad mini, a smaller version of its popular tablet. Gap Inc. (GPS:US) and J.M. Smucker (SJM:US) Co. added at least 4.8 percent as earnings topped estimates. Marvell Technology Group Ltd. lost 14 percent after predicting profit that fell short of forecasts.
The S&P 500 rose 0.2 percent to 1,418.16 at 4 p.m. in New York, as swings in the S&P 500 narrowed to 0.3 percent, the smallest daily change since November 2006. The benchmark index is within one point of a four-year peak of 1,419.04 set on April 2. The Dow Jones Industrial Average added 25.09 points, or 0.2 percent, to 13,275.20 after briefly surpassing its highest close since 2007. Volume for exchange-listed stocks in the U.S. was 5.3 billion shares, 18 percent below the three-month average.
“We have surpassed most people’s expectations for what stocks would do in June, July and August,” Rod Smyth, the Richmond, Virginia-based chief investment strategist of Riverfront Investment Group, which manages $3 billion, said in a telephone interview. “Gradually people are succumbing and putting money in.”
Confidence among U.S. consumers unexpectedly improved in August, boosting the prospect of stronger household spending this quarter, according to the Thomson Reuters/University of Michigan preliminary index of consumer sentiment. The Conference Board’s index of U.S. leading economic indicators, a gauge of the outlook for the next three to six months, climbed more than forecast in July.
The S&P 500 added 0.9 percent this week for its sixth weekly advance while the Dow is up 0.5 percent. Both measures capped their longest winning streaks since January 2011.
Concern about Europe’s debt crisis and a slowdown in China pushed the S&P 500 down as much as 9.9 percent from April through June. The index has since rallied 11 percent amid speculation global central banks will introduce further stimulus measures. The Stoxx Europe 600 (SXXP) Index today climbed to a 13-month high, extending gains for an 11th week.
“Today’s data are just a couple more pieces of the puzzle that show improvement, but not all that great,” Terry L. Morris, who helps oversee about $2.5 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “The general attitude is optimistic, maybe more optimistic than the market should have.”
The S&P 500 yesterday broke out of a narrow trading range after hovering around 1,400 for the past seven sessions. Trading volume and volatility have dropped as vacationing traders awaited policy clues from the Federal Reserve’s summit at the end of the month and a European Central Bank meeting in September.
About 5.8 billion shares a day changed hands in August, 14 percent lower than the daily mean in the first seven months of 2012, according to data compiled by Bloomberg. The Chicago Board Options Exchange Volatility Index (VIX), known as the VIX, fell 5.9 percent to 13.45 today, the lowest level since June 2007.
The S&P 500 Total Return index, which assumes dividends are reinvested back into the gauge’s 500 stocks, climbed to a record even as the regular S&P 500 remained about 9 percent below its peak in 2007. The S&P 100 Index (OEX), a measure for the biggest companies in the S&P 500, rose to the highest level since 2008.
“People are taking a high-quality, longer-term perspective and may not be trading as much because of policy uncertainty,” Jeff Schwarte, a money manager who helps oversee about $260 billion in Des Moines, Iowa, at Principal Global Investors, said in a phone interview. “What investors are trying to balance here is weaker economic data with the anticipation of a policy response from China, Europe or the U.S.”
Technology, industrial and consumer discretionary companies rose the most among 10 S&P 500 groups, climbing at least 0.5 percent. Health-care and energy stocks performed worst, erasing more than 0.2 percent.
Apple increased 1.9 percent to $648.11, its highest level ever. The tinier iPad may go on sale by October and a new television could reach stores by 2013, according a research report from Peter Misek, an analyst at Jefferies.
Gap gained 4.8 percent to a 12-year high of $35.99. The largest U.S. specialty-apparel retailer reported a 29 percent rise in second-quarter profit, aided by domestic sales. The company boosted its full-year earnings forecast.
J.M. Smucker jumped 5.1 percent to $82.96. The maker of Folgers coffee reported first-quarter earnings excluding some items of $1.17 a share. That topped the average analyst estimate of $1 in a Bloomberg survey.
EBay Inc. (EBAY:US) added 2.4 percent to $46.87, the highest level since 2005. The world’s largest Internet marketplace was rated “above average” in new coverage by Caris & Co., with a target price of $52.
Ann Inc. (ANN:US) rallied 20 percent to $33.89. The women’s clothing retailer increased its full-year sales forecast as second- quarter profit exceeded analysts’ estimates.
Marvell (MRVL:US) dropped 14 percent to $10.54 for the biggest retreat since 2006. The maker of chips for mobile phones and communication and storage gear predicted third-quarter profit, excluding certain costs, will be 24 cents a share, plus or minus 2 cents. Analysts, on average, expected 32 cents, according to a Bloomberg survey.
McKesson Corp. (MCK:US) slipped 2.5 percent, the most in the S&P 500, to $86.42. The largest U.S. drug distributor was reduced to equalweight from overweight at Morgan Stanley.
Facebook Inc. (FB:US) slipped 4.1 percent to $19.05. The world’s largest social-networking company sank 6.3 percent (FB:US) yesterday for the second-largest post-lock-up decline among companies that have gone public since January 2011. The stock reached a record low after a 60 percent increase in the number of shares available for trading.
Groupon Inc. (GRPN:US) tumbled 5 percent to $4.75, the lowest level since its debut in November. Evercore Partners Inc. downgraded shares of the daily-deal website, citing a potential for billings to decline.
Molycorp Inc. (MCP:US) declined 12 percent to $9.84. The U.S. owner of the largest rare-earth deposit outside of China raised $360 million, more than expected, selling shares and convertible bonds to help fund construction at its mine in California. Dahlman Rose & Co. cut the stock’s rating to hold from buy.
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