Most U.S. stocks rose, sending the Standard & Poor’s 500 Index to the highest level since October 2007, as investors weighed economic reports and President Barack Obama’s State of the Union address.
General Electric Co. climbed 3.6 percent after agreeing to sell its remaining stake in NBC Universal to Comcast Corp. for $16.7 billion. Comcast (CMCSA:US), the largest U.S. cable company, jumped 3 percent. Retailers in the S&P 500 rose as a group after government data showed purchases increased in January for the third consecutive month. McDonald’s Corp. lost 1.2 percent after Obama announced his plan to raise the minimum wage.
The S&P 500 advanced 0.1 percent to 1,520.33 at 4 p.m. in New York. The Dow Jones Industrial Average lost 35.79 points, or 0.3 percent, to 13,982.91. Four stocks gained for every three that fell on U.S. exchanges, with about 6 billion shares changing hands, 2.9 percent lower than the three-month average.
“I think the bias has been consistently green on the screen,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $55 billion, said in a telephone interview. “We didn’t hear anything shockingly different from Obama’s speech that would have pulled investors’ enthusiasm for stocks out of the marketplace.”
The S&P 500 has rallied 6.6 percent in 2013 as U.S. lawmakers reached a budget compromise. It has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond-buying to lower interest rates and boost economic growth. The index is 2.9 percent below its record of 1,565.15 reached in October 2007.
Obama called for raising the federal minimum wage to $9 an hour and pledged to expand trade with Europe in the State of the Union speech late yesterday. He also proposed spending $50 billion on “urgent” infrastructure projects. He lauded steps by companies such as Apple Inc., (AAPL:US) Caterpillar Inc. and Ford Motor Co. to bring manufacturing jobs back to the U.S
The president repeated his demand that Republicans accept raising tax revenue along with spending cuts as part of any “balanced” approach to his goal of $1.5 trillion in additional deficit reduction over a decade. He said the balance could be achieved by “getting rid of tax loopholes and deductions for the well-off and well-connected.”
“What I sense today is the ongoing zig and zag of the market after there’s been a major speech given by the president and just trying to sift out what it means,” Matthew Kaufler, fund manager at Federated Clover Investment Advisors, said in a phone interview. The Rochester, New York-based firm manages about $3 billion.
McDonald’s lost $1.10 to $94 for the biggest drop in the Dow. The company’s franchisees, as well as other restaurant chains, spent money lobbying against minimum-wage increases. Brinker International Inc., owner of the Chili’s and Maggiano’s dining chains, slipped 3.2 percent to $31.99, while Darden Restaurants Inc. retreated 2 percent to $45.86.
Retail sales in the U.S. rose 0.1 percent last month, matching the median forecast of economists surveyed by Bloomberg, which showed household spending is holding up even as an increase in the payroll tax takes a bigger bite from paychecks.
Retailers gained 0.6 percent among 24 groups in the S&P 500. Netflix Inc. added 4.7 percent to $186.27. Amazon increased 4.2 percent to $269.47. The world’s largest online retailer is expanding its content licensing agreement to bring shows from CBS Television Distribution and Showtime Networks to Amazon’s Prime Instant Video service.
Six out of the 10 groups in the S&P 500 rose as industrial and raw-material shares gained at least 0.3 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, advanced 2.7 percent to 12.98.
GE (GE:US) rallied 81 cents to $23.39 and Comcast advanced $1.16 to $40.13. The cable company will buy GE’s 49 percent stake in NBC Universal, following through on its purchase of a controlling stake two years ago. The sale will result in a pretax gain of about $1 billion for GE and it will use proceeds to help increase repurchases of its shares by $10 billion a year, the company said.
Comcast also released its fourth-quarter results, saying net income rose to 56 cents a share from 47 cents a year earlier. Sales climbed almost 6 percent to $15.9 billion.
U.S. Airways Group Inc. gained 2.7 percent to $14.66. The board of bankrupt American Airlines parent AMR Corp. is meeting to vote on an $11 billion merger after the two sides reached a tentative agreement that would create the world’s largest air carrier, people familiar with the matter said.
Lorillard Inc. gained 4.9 percent to $41.68. The cigarette maker posted quarterly earnings that exceeded analysts’ estimates for the first time in a year, according to data compiled by Bloomberg. The company boosted its dividend 6.5 percent to 55 cents a share.
Groupon Inc. surged 5.4 percent to $5.58. A local e- commerce marketplace Groupon began a few months ago in Chicago and New York will boost revenue as it expands nationwide over the coming quarters, according to Arvind Bhatia, an analyst at Sterne Agee & Leach Inc., who raised the online coupon provider to buy from neutral.
The KBW Bank Index, made up of 24 U.S. lenders, lost 0.6 percent. Citigroup Inc. fell 0.8 percent to $44, JPMorgan Chase & Co. dropped 0.9 percent to $48.68 and Bank of America Corp. declined 0.6 percent to $12.17. A Sheldon H. Solow-led New York realty company sued the three banks and several others for allegedly conspiring to manipulate the U.S. dollar Libor rate.
Cliffs Natural Resources Inc. (CLF:US) tumbled 20 percent to $29.29. The biggest U.S. iron-ore producer cut its quarterly dividend by 76 percent after the price of the commodity declined and a Canadian mining project was delayed.
WellPoint Inc. (WLP:US) fell 4.6 percent to $63. The second-biggest U.S. health insurer named Joseph Swedish, chief executive officer of the nonprofit Catholic hospital system Trinity Health Corp., as its next leader after a six-month search. He replaces Angela Braly, who left WellPoint last year amid investor discontent over the insurer’s performance.
Dean Foods Co. slipped 9.2 percent to $16.70. The largest U.S. dairy processor said total volume will decline in a percentage of “low single digits” this year.
Deere & Co. (DE:US), the world’s largest agricultural-equipment maker, fell 3.5 percent to $90.68. U.S. farm cash receipts for crops, one indicator for equipment sales, will fall 1.7 percent as corn and soybean prices decline, the Moline, Illinois-based company said today in a presentation on its website.
Industrywide farm equipment sales in the U.S. and Canada will be unchanged to 5 percent higher in fiscal 2013, which ends Oct. 31, Deere said. The company got 64 percent of sales from that region in fiscal 2012.
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