Bloomberg News

S&P 500 Advances 4th Day After Middle East Cease-Fire

November 21, 2012

S&P 500 Little Changed on Economic Data Amid Greek Deadlock

Deere & Co., the largest agricultural equipment maker, fell 4.3 percent as earnings missed analysts’ estimates. Photographer: Ty Wright/Bloomberg

U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a fourth day, as U.S. Secretary of State Hillary Clinton and Egyptian Foreign Minister Mohamed Amr announced a cease-fire between Israel and Hamas.

Hewlett-Packard Co. (HPQ:US) rallied 2 percent after tumbling 12 percent yesterday. Salesforce.com Inc. (CRM:US), the largest maker of online customer-management software, rose 8.8 percent after forecasting sales and profit that were in line with analysts’ projections. Deere & Co. (DE:US), the largest agricultural equipment maker, fell 3.7 percent as earnings missed analysts’ estimates.

The S&P 500 gained 0.2 percent to 1,391.03 at 4 p.m. New York time. It rose 2.8 percent in four days for the longest winning streak since Oct. 4. The Dow Jones Industrial Average added 48.38 points, or 0.4 percent, to 12,836.89 today. Volume for exchange-listed stocks in the U.S. was 4.8 billion shares, or 22 percent below the three-month daily average. The U.S. market will close for the Thanksgiving holiday tomorrow.

“The announcement of the cease-fire is by no means a fix to the issue, but it does suggest that the negotiations are going on,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. He spoke in a phone interview. “In the U.S., the economic releases were mixed, but generally positive.”

Equities rose as Israel and the Palestinian militant group Hamas agreed to call a halt to more than a week of air strikes and missile attacks, after talks brokered by Egypt’s Islamist government and the U.S.

Economic Data

Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside. The index of U.S. leading economic indicators rose at a slower pace in October. The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment for November rose to 82.7 from 82.6 at the end of last month. Economists projected 84.5 for the gauge.

Europe’s finance ministers will regroup on Nov. 26 after talks broke up without an agreement on a debt-reduction package for Greece, with creditors led by Germany refusing to put up fresh money.

“We’ve got some interesting pockets of strength in the economy that could prove to be brighter spots next year than a lot of people think, notwithstanding the fiscal cliff, which is the elephant in the room,” said Liz Ann Sonders, the New York- based chief investment strategist at Charles Schwab Corp., which has $1.9 trillion in client assets. “There’s a lot of choppiness. Europe is back in the crosshairs.”

Budget Talks

Stocks advanced over the previous three days amid better- than-forecast housing data and as President Barack Obama expressed confidence on a budget agreement with Congress. Obama met with senior Democrats and Republicans on Nov. 16 for talks to avoid $607 billion of automatic tax increases and spending cuts that, if allowed to come into force, might push the country into a recession next year.

Salesforce rose 8.8 percent to $158.78. Chief Executive Officer Marc Benioff is signing bigger enterprise agreements that give customers broad access to Salesforce’s software, following the company’s Dreamforce conference in September.

That’s helping to stave off competition from Oracle Corp. (ORCL:US), SAP AG and Microsoft Corp., which are buying companies that offer business-management tools over the Internet and gaining traction in an area Salesforce pioneered.

Vivus Inc. (VVUS:US) climbed 13 percent to $11.73. The maker of the Qsymia weight-loss medicine that won U.S. approval in July jumped after insurer Aetna Inc. cleared the way for coverage of the obesity treatment.

HP Gains

HP rallied 2 percent to $11.94. The stock plunged yesterday as the company’s $8.8 billion writedown tied to the purchase of software maker Autonomy Corp. fueled concern that Chief Executive Officer Meg Whitman and her board aren’t up to the task of engineering a turnaround.

Deere (DELL:US) fell 3.7 percent to $82.83. The company said farm- equipment sales in Europe will be unchanged or 5 percent lower in fiscal 2013 and Asia will be little changed due to “softer” economic conditions in India and China. That may undermine the company’s effort to expand the share of sales made outside the U.S. and Canada to 50 percent by 2018.

Zale Corp. (ZLC:US) tumbled 30 percent to $5.21. The operator of the Zales and Piercing Pagoda jewelry chains reported a loss that was wider than analysts estimated.

St. Jude Medical Inc. slid 12 percent to $31.37. The maker of heart rhythm devices sank after U.S. government inspectors criticized the company’s methods for testing its Durata cables used for defibrillators. Lawrence Biegelsen, an analyst at Wells Fargo & Co. in New York, downgraded St. Jude to market perform from outperform.

Climb Back

The S&P 500 (SPX) will climb back to the level it was trading at before the Nov. 6 U.S. presidential election if it crosses a key resistance, according to Royal Bank of Scotland Group Plc.

The U.S. equity benchmark on Nov. 16 rebounded from 1,346, a two-thirds Fibonacci retracement level of the rally from June to September, said Dmytro Bondar, a technical markets strategist at RBS in London. While this signals a bullish reversal, the gauge must also breach the one-third retracement, or 1,395, for further gains, he said.

“A new trend was set after a major reversal,” Bondar said. “It clearly indicates that the index is set for recovery, confirmed by candlestick patterns. In the short term, it’s bullish.”

The S&P 500 may rise to as high as 1,427 in the next two weeks, he said. The measure last closed above that level on Nov. 6. The index gained less than 0.1 percent to 1,387.81 yesterday. The S&P 500 may trade in a range or fall after reaching 1,427, Bondar said. If it clears that level, however, it may advance to its September high of 1,474.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net; Tom Stoukas in Athens at astoukas@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net


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Companies Mentioned

  • HPQ
    (Hewlett-Packard Co)
    • $37.01 USD
    • 0.34
    • 0.92%
  • CRM
    (salesforce.com inc)
    • $57.66 USD
    • 0.21
    • 0.36%
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