Intel Corp., Caterpillar Inc. and General Electric Co. helped lead the Dow Jones Industrial Average higher after Federal Reserve reports showed factory production increased 0.9 percent in February and regional data indicated the gains extended into this month. United Parcel Service Inc. rallied 5.3 percent after lifting its earnings forecast. Mariner Energy Inc. surged 42 percent after Apache Corp. agreed to buy the company.
The Standard & Poor’s 500 Index increased 0.1 percent to 1,211.67 at 4 p.m. in New York, poised for a seventh straight weekly advance. The Dow Jones Industrial Average rose 21.46 points, or 0.2 percent, to 11,144.57 today.
“There’s plenty of fuel out there that could propel stocks higher,” said Hank Smith, who helps oversee $6 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “Corporate earnings continue to accelerate. That’s adding confidence about the economic recovery.”
Equities fluctuated in early trading amid concern the market has risen too far, too fast. The S&P 500’s relative strength index, a gauge of momentum, has been above 65 for 29 straight days, the longest stretch since 1986, according to Bloomberg data. A reading above 70 is a signal to sell for many technical analysts. The S&P 500’s RSI has topped 70 for five straight days and rose to almost 79 today.
79 Percent Rally
The S&P 500 has rallied 79 percent from a 12-year low in March 2009 to the highest level in 18 months. Combined profit for S&P 500 companies will increase 30 percent in the first quarter from a year earlier, according to analyst estimates compiled by Bloomberg.
Benchmark indexes opened lower after the Labor Department announced that initial jobless claims rose to 484,000 last week, an increase of 24,000 from the previous week and above the 440,000 estimated by economists in a Bloomberg survey.
Industrial shares advanced the most of 10 groups in the S&P 500, led by UPS and First Solar Inc. Health care and financial shares were the worst performers with losses of at least 0.3 percent.
UPS jumped 5.3 percent to $68.89, its highest price since June 2008 and biggest gain in a year, after the company boosted its full-year forecast and reported first-quarter earnings excluding some items of 71 cents a share. Analysts expected 57 cents, according to a Bloomberg survey. Piper Jaffray upgraded UPS shares to “overweight” from “neutral.” FedEx Corp. added 1.7 percent to $95.62.
First Solar
First Solar rose 4 percent to $137.90, its highest price in three months. U.S. solar power developers including First Solar and SunPower Corp. added 481 megawatts of the renewable energy last year, according to the Solar Energy Industry Association.
Intel continued its rally after boosting its gross margin forecast for 2010 and reporting earnings that exceeded analyst estimates on April 13. The world’s largest chipmaker gained 3 percent to $24.22, its highest price since August 2008, after rising 3.3 percent yesterday.
Google Inc. and Advanced Micro Devices Inc. reported earnings after the market closed today. Google, owner of the world’s most popular search engine, reported first-quarter profit that fell short of some analysts’ estimates as ad sales didn’t grow enough to satisfy investors. Its shares slumped 4.5 percent to $568.69 in extended traded after gaining 1.1 percent in the regular session.
AMD Earnings
AMD, the second-largest maker of microprocessors, reported first-quarter sales that beat analysts’ predictions, adding to evidence that personal-computer demand is increasing. AMD rose 5 cents to $10.21 in after-hours trading after a 2.7 percent rally in the regular session.
Bank of America Corp. rose 0.4 percent to $19.48 and GE gained 0.8 percent to $19.50 ahead of their profit announcements tomorrow morning.
Crude oil fell for the sixth time in seven days, dropping 0.4 percent to $85.51 a barrel at the close of floor trading on the New York Mercantile Exchange as the jobless and industrial- production reports signaled energy demand may be slow to recover.
The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.7 percent, halting a four-session slump.
Apache to Buy Mariner
Mariner Energy soared 42 percent, the most since the company was spun off from Forest Oil Corp. in 2006, to $25.68. Apache, the largest independent U.S. oil producer by market value, agreed to buy the company for about $26.22 per share in cash and stock. Apache shares lost 1.3 percent to $106.67.
E*Trade Financial Corp. shares gained 4.7 percent to $1.78 after TD Ameritrade Holding Corp. Chief Executive Officer Fred Tomczyk told Reuters his company has the “firepower” for an acquisition.
Yum! Brands Inc. climbed 2.6 percent to $42.78 after the owner of Taco Bell and other restaurant chains reported an 11 percent rise in first-quarter profit, helped by sales growth in China.
American Superconductor Corp. climbed 9.7 percent to $31.89 after Deutsche Bank AG raised its recommendation for the maker of wind turbine components and transmission lines to “buy” from “hold.”
Macerich Co. fell 6.5 percent to $40.90, the biggest drop in six months, to lead a decline in real estate investment trusts after selling 30 million shares in a secondary offering at $41 a share. Kilroy Realty Corp. and Medical Property Trust Inc. also slumped after selling shares.
“There’s a general notion out there that these things are pricey,” said Rich Moore, managing director at RBC Capital Markets in Solon, Ohio. “When one guy goes out and does an offering, it sort of confirms that these things are pricey. It confirms that management thinks these things are at the peak too. It just goes to everybody’s suspicion.”
REITs posted the five biggest losses in the S&P 500, with Kimco Realty Corp., Health Care REIT Inc., Simon Property Group Inc., Apartment Investment & Management Co. and Vornado Realty Trust retreating at least 3.5 percent.
