U.S. stocks rose, rebounding from the biggest selloff in more than a month for the Standard & Poor’s 500 Index, as central banks’ pledges on stimulus efforts overshadowed a rise in American jobless claims.
McDonald’s Corp. and Hewlett-Packard Co. added more than 1.4 percent to pace advances in the Dow Jones Industrial Average. Best Buy Co. rose 16 percent, the most in the S&P 500, after Samsung Electronics Co. said it would staff mini-stores at the retailer’s U.S. locations. Facebook Inc. climbed 3.1 percent as it announced smartphone software with a modified version of Google Inc.’s operating system.
The S&P 500 rose 0.4 percent to 1,559.98 at 4 p.m. in New York. The Dow gained 55.76 points, or 0.4 percent, to 14,606.11. About 6 billion shares changed hands on U.S. exchanges, 5.3 percent below the three-month average.
“Expectations were high for the Bank of Japan and they managed to exceed expectations,” Janelle Nelson, a Minneapolis- based portfolio analyst with RBC Wealth Management’s portfolio advisory group, said in a phone interview. Her firm manages about $315 billion in client assets. “The big issue for investors will be what the U.S. employment report shows tomorrow.”
Equities climbed today after the Bank of Japan strengthened a stimulus program that will see the central bank buy 7 trillion yen ($73 billion) of bonds a month. European Central Bank President Mario Draghi signaled the bank will keep monetary policy loose for an extended period and that further easing is possible if economic conditions deteriorate. ECB officials meeting in Frankfurt left interest rates on hold.
The bull market in equities entered its fifth year last month, with the S&P 500 (SPX) more than doubling from its bottom in 2009, as corporate earnings topped estimates and the Federal Reserve carried out an unprecedented three rounds of bond purchases to spur the economy. The S&P 500 and Dow closed at all-time highs on April 2.
Jobless claims rose by 28,000 to 385,000 in the week ended March 30, the highest since Nov. 24, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 353,000. The results reflected the difficulty the government has adjusting the figures around the Easter holiday and spring break at schools.
The S&P 500 (SPX) slid 1.1 percent yesterday, the most in more than a month, as a report from ADP Research Institute showed companies boosted employment by 158,000 workers in March, below economists’ forecasts calling for a 200,000 gain.
The jobs data come before tomorrow’s non-farm payrolls report from the Labor Department, which may show employers hired a net 190,000 workers for the month, according to the median forecast of 87 economists surveyed by Bloomberg.
Investors will begin to focus on first-quarter earnings reports beginning next week, with Alcoa Inc. scheduled on April 8 to be the first company in the Dow to report results. Profits among S&P 500 companies are forecast to decline 1.9 percent for the period, for the first retreat since 2009, according to estimates compiled by Bloomberg. In January, analysts forecast earnings growth of 1.2 percent. Profit expanded by 8 percent in the fourth quarter of 2012.
The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses, fell 2.3 percent to 13.89 today, after jumping 11 percent yesterday. The gauge, known as the VIX (VIX), is down 23 percent for the year.
Phone, utility and financial companies rose the most among 10 groups in the S&P 500, increasing at least 0.9 percent. Technology and energy shares slipped more than 0.1 percent. McDonald’s added 1.4 percent to $100.63. AT&T Inc. jumped 1.7 percent to $37.91. Bank of America Corp. increased 1.1 percent to $11.94 and JPMorgan Chase & Co. rose 1.4 percent to $47.49.
Hewlett-Packard added 1.8 percent to $22.30. After the close of regular trading, the company said Ray Lane is stepping down as chairman, in a shakeup that underscores investors’ dismay with the botched acquisition of Autonomy Corp. The shares slipped 0.9 percent as of 5:05 p.m. New York time.
Best Buy climbed 16 percent to $25.13, the highest level since March 2012. South Korea-based electronics maker Samsung said it will open 500 Samsung Experience Shops inside Best Buy locations starting April 8. The companies plan to add smaller Samsung spaces by June at about 1,000 other Best Buy and Best Buy Mobile locations, Samsung said.
Facebook rose 3.1 percent to $27.07. The company unveiled smartphone software that puts social-networking features front and center on a handset, stepping up efforts to boost sales of advertising on small screens. The new software, which the company calls Home, makes it easier to access Facebook features on a smartphone’s home screen, Chief Executive Officer Mark Zuckerberg said at an event today in Menlo Park, California.
J.C. Penney Co. gained 4.5 percent to $15.08 after Gilford Securities Inc. analyst Bernard Sosnick raised his rating on the department-store company to neutral from sell, adding that the company is “far from out of the woods.”
Brinker International Inc. added 2.1 percent to $38.48 after Raymond James Financial Inc. raised its rating on the full-service restaurant company to the equivalent of a buy from a hold rating. Equity analyst Bryan Elliott’s 12-month target price is $42 a share.
Teradata Corp. fell 7.5 percent, the most in the S&P 500, to $51.89 after Morgan Stanley analyst Katy Huberty cut her estimates for the database management company’s 2013 revenue and earnings estimates. Huberty removed the company from her best ideas list.
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