U.S. stocks rise as retail sales, Citigroup profit top estimates

U.S. stocks rose, as the Standard & Poor’s 500 Index rebounded from its biggest weekly drop in four months, after American retail sales and Citigroup Inc.’s earnings topped estimates.

Citigroup soared 5 percent as results were helped by a surge in bond-trading revenue. Texas Instruments Inc. rose 3.4 percent on a report Amazon.com Inc. may buy its mobile chip unit. Advanced Micro Devices Inc. added 0.4 percent as it was said to plan job cuts. Apple Inc. advanced 0.5 percent after falling as much as 0.9 percent earlier.

The S&P 500 climbed 0.6 percent to 1,437.43 at 3:33 p.m. in New York. The Dow Jones Industrial Average rose 85.38 points, or 0.6 percent, to 13,414.23. Trading in S&P 500 companies was 6.9 percent above the 30-day average at this time of day.

“The retail sales report looked a little bit better than expected,” Dan Veru, who oversees $3.5 billion as chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, said in a phone interview. “The direction of the economic data is positive, but we’re moving at a very slow pace and the market is very fragile to external shock. The big question regarding earnings is whether expectations have come down enough so that companies can beat guidance.”

U.S. stocks rose as the Commerce Department said retail sales climbed 1.1 in September following a revised 1.2 percent increase in August that was the biggest since October 2010 and larger than previously reported. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent rise. A separate report showed manufacturing in the New York region contracted for a third straight month in October as shipments and employment declined.

Earnings Season

The S&P 500 sank 2.2 percent last week, the biggest retreat since June 1, as the International Monetary Fund reduced its global growth forecasts and earnings projections from Alcoa Inc. and AMD disappointed investors. The benchmark index has rallied 14 percent this year as the Fed announced a third round of bond purchases and companies posted better-than-expected earnings in the first half of 2012.

Some 84 companies in the S&P 500 release results this week, according to data compiled by Bloomberg. Of the 38 companies in the benchmark index that have reported since Oct. 9, 27 posted earnings that exceeded analyst estimates, according to data compiled by Bloomberg.

Citigroup jumped 5 percent to $36.47 today. Chief Executive Officer Vikram Pandit, 55, is cutting jobs and shedding unwanted assets, including a 49 percent stake in Smith Barney, as he seeks to return capital to shareholders and comply with new regulations on buffers against losses. Revenue from fixed-income trading surged 63 percent excluding accounting adjustments after tumbling last year during the European sovereign-debt crisis.

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