Most U.S. stocks rose, with the Standard & Poor’s 500 Index poised for its biggest weekly rally in 13 months, after data showed employers added workers in December at about the same pace as the prior month.
Eli Lilly & Co. jumped 3.8 percent as it forecast 2013 earnings above analyst expectations. Citigroup Inc. advanced 1.4 percent after Goldman Sachs Group Inc. added the bank to its conviction buy list. Avon Products Inc. gained 3 percent after Bank of America Corp. raised its rating on the stock. Apple Inc., the world’s most valuable company, slumped 2.8 percent for the biggest decline in the S&P 500 as technology shares tumbled.
The S&P 500 added 0.3 percent to 1,462.99 at 11:40 a.m. in New York. The Dow Jones Industrial Average added 16.80 points, or 0.1 percent, to 13,408.16 today. More than two stocks rose for each that fell on U.S. exchanges. Trading in S&P 500 companies was in line with the 30-day average at this time of day.
“It’s not an incredibly strongly labor market but it’s mending and it’s going to continue to take time,” Greg Woodard, a strategist at Manning & Napier in Fairport, New York, which manages about $40 billion, said by telephone. “The market realized there’s some outside help. The Fed continues to provide a lot of liquidity. We got some resolution on a lot of uncertainty, although we pushed that uncertainty two months down the road.”
Payrolls rose by 155,000 workers last month following a revised 161,000 advance in November that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg called for a increase of 152,000. The unemployment rate held at 7.8 percent, matching the lowest since December 2008.
A separate release from the Institute for Supply Management showed its index of U.S. non-manufacturing businesses rose to 56.1 in December from 54.7 a month earlier. The median forecast of 66 economists surveyed by Bloomberg projected a decline to 54.1.
The S&P 500 has risen 4.2 percent this week, its largest advance since December 2011, and yesterday climbed within one point of its highest closing level in five years before retreating. The gauge soared 2.5 percent on Jan. 2 after Republicans and Democrats agreed on a compromise budget that avoided the so-called fiscal cliff of sweeping tax increases and spending cuts.
The equity benchmark surged 13 percent in 2012, its biggest annual rally in three years, as the Federal Reserve expanded asset purchases and the European Central Bank announced an unlimited bond-buying plan. Stocks slipped yesterday after Fed policy makers said they will probably end their $85 billion monthly bond-purchase program sometime in 2013.
“It was not too hot, not too cold and just right,” Douglas Cote, chief market strategist at New York-based ING U.S. Investment Management, said by phone on the jobs report. His firm oversees about $165 billion. “In light of the uncertainty in December with the fiscal cliff, concern over earnings and other negative market events, the report is a positive surprise and shows employers are still hiring.”
RBC Dominion Securities Inc. raised its stance on U.S. equities in a report today, recommending that investors hold more of the securities than are represented in benchmarks.
“Regardless of what one might think about Washington’s last-minute fiscal deal, it seems to have removed a layer of uncertainty and this is positive for share prices,” analysts led by Myles Zyblock wrote in the note.
Eli Lilly rose 3.8 percent to $51.62. The Indianapolis- based drugmaker said net income will be $4.03 to $4.18 a share this year. Excluding one-time items, the company expects profit of $3.75 to $3.90 a share, more than the $3.71 average of 18 analyst estimates compiled by Bloomberg.
Citigroup gained 1.4 percent to $41.96. New Chief Executive Officer Michael Corbat may lead Citigroup to better returns and increased efficiency, according to Goldman Sachs.
Avon climbed for the fourth straight trading day, rising 3 percent to $16.05. Bank of America raised its rating on the cosmetics seller to a buy from neutral.
Mosaic Co. rallied 2.5 percent to $58.16. The largest U.S. fertilizer producer reported fiscal second-quarter profit that beat analysts’ estimates after North American sales helped potash volumes to exceed its own forecast. Profit excluding a tax benefit and a foreign-exchange loss was $1.02 a share, exceeding the 88-cent average of 11 estimates.
PerkinElmer Inc. climbed 2.2 percent to $32.71, the highest intraday level since January 2002, after Morgan Stanley lifted its rating on the stock to overweight from equal weight. The firm said the diagnostic and research company has a better revenue and earnings outlook than its peers.
Johnson & Johnson added 1.2 percent to $71.61 after people familiar with the situation said the company has shown interest in Warburg Pincus LLC’s contact-lens manufacturer Bausch & Lomb Inc. Warburg wants at least $10 billion for the business, the people said.
IPhone maker Apple slumped 2.8 percent to $526.88. Component production for Apple devices in the first quarter is “exposed to major adjustment risk” as sales to the end of 2012 were weaker than expected, Yasuo Nakane, a Tokyo-based analyst at Deutsche Bank AG, said.
Technology companies lost 0.6 percent for the biggest decline among 10 groups in the S&P 500. Minutes from the latest Federal Open Market Committee meeting released yesterday said business expenditures on equipment and software decreased in the third quarter.
International Business Machines Corp. lost 0.8 percent to $193.80. Microsoft Corp., the world’s largest software maker, fell 1.2 percent to $26.92, while Intel Corp., the biggest chipmaker, dropped 1.1 percent to $21.10.
Coinstar Inc. slid 6.2 percent to $48.84 after announcing that Chief Executive Officer Paul Davis will retire on March 31. The owner of the Redbox movie-rental kiosks said Chief Financial Officer J. Scott Di Valerio will take over as CEO.