The Standard & Poor’s 500 Index rose, erasing losses in the final hour of trading, as a rebound in Apple (AAPL:US) Inc. overshadowed disappointment after Spanish Prime Minister Mariano Rajoy said a bailout request is not imminent.
Apple, the largest company by market value, reversed a 1.3 percent drop to end the day higher. Citigroup Inc. rose 1.6 percent as KBW raised its rating. MetroPCS Communications Inc. rallied 18 percent after Deutsche Telekom AG said the companies are in talks to combine U.S. wireless units. Chipotle Mexican Grill Inc. (CMG:US) slid 4.2 percent after hedge fund manager David Einhorn recommended betting against the restaurant chain. Mosaic (MOS:US) Co. lost 3.9 percent amid disappointing earnings.
The S&P 500 rose 0.1 percent to 1,445.75 at 4 p.m. New York time, after dropping as much as 0.4 percent. The Dow Jones Industrial Average lost 32.75 points, or 0.2 percent, to 13,482.36. Volume for exchange-listed stocks in the U.S. was 5.8 billion shares, or 3.4 percent below the three-month average.
“Spain took down the market, but people looked past it and found some good entry points in technology stocks,” Frank Ingarra, who helps manage $1.4 billion at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a telephone interview. “Apple is such a big part of the market and it’s been on a downtrend for a couple of days, so it makes sense for the stock to get some relief and rebound which would translate into the indexes.”
Stocks slumped earlier as Rajoy said he has no plans to request rescue funds for Spain in the near term, defying speculation that the nation was preparing to ask for a bailout. Spanish regional presidents met in Madrid today after Economy Minister Luis de Guindos said yesterday the nation is pressing on with its analysis of whether to seek a bailout.
The S&P 500 rallied 15 percent from a June low to a four-year high on Sept. 14 amid optimism central banks around the world will take actions to spur growth. The Reserve Bank of Australia today cut its benchmark interest rate by a quarter percentage point to 3.25 percent, the lowest level since 2009.
“It’s a balance of sentiment among people who think that the market still has further upside to the S&P 500 to 1,550 this year, and those that are a little cautious” ahead of Friday’s employment report, Michael James, a managing director of equity trading at Wedbush Securities Inc. in Los Angeles, said in a phone interview.
The jobless rate in the U.S. probably rose to 8.2 percent last month from 8.1 percent in August, as employers kept a lid on hiring, economists said before a report this week. Payrolls increased by 115,000 in September, less than the 139,000 average over the first eight months of the year, the report, due Oct. 5, may also show.
Apple rose 0.3 percent to $661.31 today. It reversed its loss in the final hour of the session after briefly dipping below its average price from the past 50 days. The company had declined 6.1 percent since reaching a record high of $702.10 on Sept. 19. The shares are still up 63 percent in 2012.
Health-care and utilities added at least 0.4 percent for the best performances among 10 S&P 500 industry groups. Companies whose earnings are most-tied to economic swings declined, with raw-materials producers, industrial and consumer-discretionary stocks posting the only losses among the 10 groups.
Financial shares increased 0.3 percent as a group. Citigroup (C:US) gained 1.6 percent to $33.26 as KBW raised the stock to outperform, meaning investors should buy the shares, from market perform.
MetroPCS surged 18 percent, the most in the S&P 500, to $13.57. Deutsche Telekom said the plan includes putting its T-Mobile USA unit and MetroPCS into one entity in which the German company will hold the majority of shares. Deutsche Telekom’s supervisory board is scheduled to meet tomorrow to approve the transaction, according to people with knowledge of the matter, who asked not to be identified because the details are confidential.
Sprint Nextel Corp., the third-largest U.S. wireless carrier, declined 5.4 percent to $4.90 for the biggest decline in the S&P 500.
PetSmart Inc. (PETM:US) gained 1.5 percent to $68.55. The pet retailer will replace Sunoco Inc. in the S&P 500 after the close of trading on Oct. 4, according to a statement from the index provider. Sunoco, the Philadelphia-based oil refiner, is being acquired by Energy Transfer Partners LP on or about that date, S&P said.
Chipotle fell 4.2 percent to $302.96. Einhorn, who helps oversee $7.7 billion as president of Greenlight Capital Inc., said today at the Value Investing Congress in New York that the company has too high of a valuation and will face challenges from Yum! Brands Inc.’s Taco Bell chain. Chipotle trades for about 36 times earnings, compared with a multiple of 14.7 for the S&P 500.
Investors should buy General Motors Co. (GM:US) as shares of the largest U.S. automaker are inexpensive and its European operations may break even in 2015, Einhorn said. Shares of GM climbed 2.6 percent to $23.68 even as the automaker announced September sales that missed analysts’ estimates.
Mosaic declined 3.9 percent to $55.76. The fertilizer producer reported fiscal first-quarter profit and revenue that missed analysts’ estimates after prices and volumes declined.
MSCI Inc. (MSCI:US) tumbled 27 percent, the most since its 2007 initial public offering, to $26.21. Vanguard Group Inc., the largest U.S. mutual-fund provider, will drop the company as the benchmark provider for 22 index funds holding about $537 billion in assets, to cut costs for fund shareholders over time.
Fifth & Pacific Cos. (FNP:US) slumped 11 percent to $11.32. The owner of fashion labels including Kate Spade and Lucky Brand cut its profit forecast because of sliding sales of its Juicy Couture line.
Express Inc. (EXPR:US) dropped 22 percent to $11.68. The specialty-apparel retailer with more than 600 stores said third-quarter profit will be less than it previously estimated because of increased discounting.
ArQule Inc. (ARQL:US), a maker of experimental cancer drugs, plunged 56 percent to $2.18 after it halted a study of a lung-tumor treatment that failed to meet goals for improving survival rates.
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