Most U.S. stocks rose as a jump in housing starts to a four-year high overshadowed earnings that disappointed investors at two of the largest technology companies. Treasuries fell, while the euro climbed with Spanish and Italian bonds.
The Standard & Poor’s 500 Index added 0.4 percent to 1,460.90 at 4 p.m. in New York as homebuilders advanced while International Business Machines Corp. and Intel Corp. retreated after reporting earnings. About two stocks climbed for each that fell in the U.S. The euro gained 0.5 percent to $1.3122. Spain’s 10-year bond yield dropped 34 basis points to 5.47 percent, while Italian rates sank 17 basis points. Ten-year U.S. yields added nine basis points to 1.80 percent.
An index of 11 homebuilders surged after housing starts jumped 15 percent to an 872,000 annual rate last month, exceeding all forecasts in a Bloomberg survey of economists. Spain maintained its investment-grade debt rating from Moody’s Investors Service, which said there’s less risk of losing market access because of the European Central Bank’s willingness to buy the nation’s debt.
“The economic data suggest that this continues to be a slow, grinding recovery,” Stephen Wood, the New York-based chief market strategist for North America for Russell Investments, which oversees $152 billion, said in a phone interview. “Not every company will execute or outperform in a challenging environment, which means security selection becomes a more-important investment strategy.”
The S&P 500 extended its three-day rally to more than 2 percent, the biggest gain in a month. Indexes of financial, energy and consumer-discretionary companies helped lead the advance in the S&P 500 amid 10 industries. PulteGroup Inc., Masco Corp., Lennar Corp. and D.R. Horton Inc. paced gains among housing-related stocks.
Earnings have increased 2.7 percent and beaten analysts’ estimates at 76 percent of the 70 companies in the S&P 500 that released results so far, according to data compiled by Bloomberg. Analysts as of last week had forecast S&P 500 profits decreased 0.9 percent, halting a three-year streak of growth.
“The housing number was amazing,” Randall Warren, who oversees $75 million as chief investment officer of Warren Financial Service in Exton, Pennsylvania, said in a phone interview. “Corporate earnings have been strong in a slow growth environment, so if housing can help improve the economy then we could see a move up in stocks.”