U.S. stocks advance on earnings as investors await Obama address

Obama Address

Obama is due to deliver his State of the Union address at 9 p.m. in Washington. He will make proposals for spending on infrastructure, clean energy and education, according to an administration official briefed on the speech. Obama will argue that fostering economic growth remains the best strategy to narrow a federal budget gap that has exceeded $1 trillion in each of the last four years.

Eight of the 10 industry groups in the S&P 500 rose today as financial, phone and industrial companies performed the best, adding at least 0.6%. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell 0.9% to 12.82.

Michael Kors, named for the designer who founded the company, increased $6.02 to $63.02. Profit excluding certain items will be as much as $1.82 a share in the company’s fiscal 2013, compared with a previous estimate of as much as $1.50, Michael Kors said. Analysts estimated $1.57 a share, according to the average of 14 projections compiled by Bloomberg.

Evaluating Alternatives

Avon Products jumped $3.25 to $20.53. The world’s largest door-to-door cosmetics seller reported fourth-quarter adjusted profit that topped analysts’ estimates as new Chief Executive Officer Sheri McCoy trimmed costs. McCoy said on a conference call that she would seek strategic alternatives for the company’s Silpada jewelry unit, where sales fell 18% in the fourth quarter.

Masco Corp. rallied 14% to $20.35. The home improvement and building products maker reported fourth-quarter earnings and sales that exceeded analysts’ estimates.

An S&P 500 gauge of homebuilders advanced 5.5%, the most since July, as all of its 11 members gained. D.R. Horton Inc. jumped 6.8% to $24.48 while PulteGroup Inc. added 6.5% to $20.55.

Fossil Inc. surged 5% to $112.87 after the maker of the namesake watch brand said its fourth-quarter net sales increased 14% to a record $947.7 million, surpassing estimates.

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