U.S. stocks advance amid better-than-estimated economic data

Stock Buyback

Bristol-Myers gained 1.7 percent to $35.09 after it authorized $3 billion in additional repurchases to be made over the “next couple years.” The new phase of the buyback program, announced in a statement today by the New York-based drugmaker, gives the company the ability to repurchase $3.34 billion of an estimated $58.3 billion in stock.

Lennar Corp. jumped 5.2 percent to $28.82. The third- largest U.S. homebuilder by revenue climbed after a tax benefit and improving demand fueled a surge in its fiscal second-quarter profit.

Facebook slid 2.2 percent to $32.38. The firms starting coverage on the company include its lead underwriter, Morgan Stanley. The New York-based bank started Facebook with the equivalent of a buy rating, as did seven other firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc. There were eight holds and one sell, data compiled by Bloomberg show.

107 Times

The analysts’ underwriting banks have come under criticism after the IPO was set at a price that valued Facebook at 107 times reported earnings in the past 12 months, more than every Standard & Poor’s 500 Index stock except two. Facebook fell below its initial public offering price of $38 on the second day of trading on May 21 and hasn’t returned since.

O’Reilly Automotive Inc. tumbled 17 percent to $79.88. The retailer of auto parts, tools and accessories sank the most in more than a decade after saying sales growth was slower than expected and second-quarter profit will be on the lower end of the company’s forecast range.

Economic reports are due to take a turn for the better that will lift U.S. stocks, according to Binky Chadha, chief global strategist at Deutsche Bank AG.

Investors are suffering from “data disappointment” that has become extreme by historical standards, Chadha wrote in a report two days ago. “The typical pattern from here would be for fewer negative surprises and then positive ones.”

<< Page 2 of 3 >>

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus