U.S. stocks fluctuated between gains and losses, with the Standard & Poor’s 500 Index trading near a record high, as a rise in consumer confidence offset a drop in business activity and investors weighed earnings data.
Apple Inc. climbed 2.8% as the iPhone maker is said to be selling $17 billion of bonds in the biggest U.S. corporate offering on record. Avon Products Inc. gained 3.7% after earnings topped analysts’ forecasts. Pfizer Inc. dropped 3.6% as the world’s biggest drugmaker reported earnings that fell short of analysts’ projections. Newmont Mining Corp. lost 6.1% as the biggest U.S. gold producer reported profit that missed estimates.
The S&P 500 added 0.1% to 1,594.57 as of 3:20 p.m. in New York, after falling as much as 0.5% earlier. The Dow Jones Industrial Average slipped 2.36 points, or less than 0.1%, to 14,816.39. Trading in S&P 500 stocks was in line with the 30-day average at this time of day.
“People have seen what the market has been doing and so they just continue to tiptoe into equities,” Jason Cooper, who helps oversee $2.5 billion in South Bend, Indiana, at 1st Source Investment Advisors, said in a phone interview. “In that same regard, a lot of people are ready to say ‘hey, this thing can’t go any further. Go slow about it.’ They’re willing to pull out if things get bad.”
Confidence among U.S. consumers climbed more than forecast in April to a five-month high as Americans’ outlook for the economy and their incomes improved, according to a gauge from the Conference Board. The S&P/Case-Schiller index of property values in 20 cities showed residential real-estate prices increased in February by the most since May 2006, a sign that the U.S. housing market is strengthening.
Business activity in the U.S. unexpectedly shrank in April for the first time in more than three years, the MNI Chicago Report’s business barometer showed.
The Bloomberg Economic Surprise Index, which measures the degree to which economic data exceeded or missed projections, slipped today to minus 0.083, the lowest level since October. The measure peaked at 0.45 in February.
The S&P 500 has climbed 1.6% in April for a sixth monthly advance, the longest streak since September 2009. The bull market in U.S. equities entered its fifth year last month and the gauge has surged 136% from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the Federal Reserve.
Leon Black, chief executive officer of buyout firm Apollo Global Management LLC, said prices for traditional buyouts have risen so much that it’s a good time to sell.
“We think it’s a fabulous environment to be selling,” Black said today during a panel discussion at the Milken Institute conference in Los Angeles, adding that Apollo has sold about $13 billion in assets in the last 15 months. “We’re selling everything that’s not nailed down, and if we’re not selling, we’re refinancing.”
The Fed may consider maintaining its bond-buying program at a two-day meeting starting today, after a report last week showed the world’s largest economy grew less than forecast in the first quarter.
The central bank will probably continue its “aggressive” easing program this year, Former Fed Governor Kevin Warsh said yesterday in a Bloomberg Television interview at the Milken Institute Global Conference in Los Angeles.
The European Central Bank will cut its benchmark interest rate to a record low of 0.5% on May 2, according to the median estimate of economists in a Bloomberg survey.
Invesco Ltd., Franklin Resources Inc. and 36 other S&P 500 companies report quarterly earnings today. Of the 306 that have reported so far, 73% exceeded analysts’ predictions, data compiled by Bloomberg show. Profit at S&P 500 companies rose 1.1% in the first three months of the year, according to analysts’ projections compiled by Bloomberg.
“Earnings season has been OK, but it’s not like it’s growing strongly,” Brad Thompson, director of research at Frost Investment Advisors LLC in San Antonio, Texas, said in a phone interview. His firm manages $9 billion. “We have a strong market with defensive sectors doing well. The key element here is when does it transition. I’ll get more confident when it broadens out and we get more cyclicals doing better. That’s going to be contingent on economic fundamentals.”
Companies whose earnings are least tied to economic swings led this year’s rally as gauges of health-care, utility and consumer-staples providers in the S&P 500 jumped at least 17%. Commodity and technology shares performed worst, rising no more than 8.3%.
The Chicago Board Options Exchange Volatility Index, or VIX, slid 0.4% to 13.77 today. The gauge for options hit a six-year low in March and is down 24% this year amid reduced demand for protection against losses in the S&P 500.
Technology stocks rose the most among 10 industries, rallying 1%. The group has gained every day since April 19, jumping 5.6% over seven trading days, the most since March 2012.
Apple climbed 2.8% to $442.05. The company is issuing $3 billion of floating-rate notes and $14 billion of fixed-rate securities in six parts with maturities from three to 30 years, according to a person familiar with the offering.
Proceeds may help the company avoid so-called repatriation taxes on its $102.3 billion of funds held overseas as it returns an additional $55 billion to shareholders through 2015 to compensate for a stock that’s been hammered by signs of slowing growth. Apple has fallen 37% from its record $702.10 closing price in September.
International Business Machines Corp. added 1.4% to $201.85. The biggest computer-services company boosted its dividend 12% and approved $5 billion in stock buybacks, rewarding investors after a disappointing earnings report.
Avon climbed 3.7% to $23.06. The door-to-door cosmetics seller reported first-quarter profit that topped analysts’ estimates as Chief Executive Officer Sheri McCoy’s cost-reduction plan starts to produce results.
Best Buy Co. jumped 6.9% to $25.86. The world’s largest consumer-electronics retailer said it will exit Europe by selling its 50% stake in a mobile-phone venture to partner Carphone Warehouse Group Plc for 500 million pounds ($775 million).
Best Buy Chief Executive Officer Hubert Joly, who took charge in September, is evaluating the retailer’s foreign units to free up cash and resources in his effort to revive U.S. stores hurt by competition from Amazon.com Inc. and Wal-Mart Stores Inc.
Invesco advanced 6% to $31.51. The owner of the Invesco, Van Kampen and PowerShares funds said first-quarter profit rose 15% as record client deposits lifted assets.
Pfizer retreated 3.6% to $29.33 as it posted first- quarter earnings excluding some items of 54 cents a share, missing the 55-cent average projection of analysts in a Bloomberg survey. Full-year earnings excluding one-time items may be $2.14 to $2.24 a share, Pfizer said. The company gave a previous 2013 forecast of $2.20 to $2.30 in January.
Newmont Mining declined 6.1% to $31.90 after saying late yesterday that first-quarter net income fell as gold prices declined and costs were higher than expected. Earnings excluding one-time items were 71 cents a share, trailing the 76 cent- average analyst estimate in a Bloomberg survey.
Pitney Bowes Inc. tumbled 14%, the most since November, to $13.97. The maker of postal meters slashed dividends by half as first-quarter earnings trailed analyst forecasts.
Cummins Inc. dropped 6.4% to $106.03. The maker of diesel engines reported first-quarter earnings excluding some items of $1.44 a share, trailing the average analyst estimate of $1.86.