General Motors gained 3.5% to $31.23. The automaker, after losing more than $18 billion in Europe since 1999, narrowed its first-quarter loss in the region, outpacing Ford Motor Co. and helping it beat analysts’ earnings estimates.
MetLife added 4.1% to $39.97. The largest U.S. life insurer reported a first-quarter profit compared with a year- earlier loss as Chief Executive Officer Steven Kandarian expands outside the U.S. Kandarian is searching for customers in faster- growing economies and reducing expenses as slow expansion in the company’s main markets weighs on results.
Prudential rose 7.3% to $63.58. The No. 2 U.S. life insurer also posted results that exceeded analysts’ estimates.
Visa Inc. climbed 5.9% to a record $175.79. The biggest payments network posted a quarterly profit that beat analysts’ estimates as spending on credit and debit cards rose.
Gilead Sciences Inc. rose 4.6% to $52.42. The company is moving its experimental drug combination against hepatitis C into a late-stage trial after it cured 95% of patients who used the medicine for eight weeks.
Expeditors International of Washington Inc. climbed 5% to $37.09. The manager of cargo ships posted a second consecutive quarterly increase in airfreight tonnage during the first three months of the year and said the company had “a strong finish” in March.
“After having swum in deep waters for so long, it’s somewhat invigorating to feel that your feet might actually be touching ground,” Chairman and Chief Executive Officer Peter J. Rose said in a statement.
Seagate Technology Plc gained 8% to $39.88. The maker of computer disk drives reported fiscal third-quarter profit and sales that exceeded analysts’ forecasts.
International Paper Co. slipped 3.4% to $44.33. The world’s largest maker of office paper reported operating profit of 65 cents a share in the first quarter. That trailed the average analyst estimate of 74 cents in a Bloomberg survey.
The Chicago Board Options Exchange Volatility Index, or VIX, slid 6.1% to 13.60 as investors cut demand for protection against losses in the S&P 500. Historical relationships between U.S. equity and options prices have come under increasing strain in the past week, with the rally in the S&P 500 awakening demand among both speculators and hedgers.
The VIX moved in the same direction as the S&P 500 for four straight days through April 29, including three advances and one drop. That’s the longest stretch of lockstep moves since February 2007, data compiled by Bloomberg show. The indexes swing in the opposite direction about 80% of the time.
Options prices usually fall when equities gain because the optimism driving share prices reduces the demand for protection against losses. That relationship is wavering as traders become less certain about the direction of stocks after a four-year, 134% advance, according to Andrew Greeley, a senior managing director at Stamford, Connecticut-based Acorn Derivatives Management Corp. Dealers are charging bears more for insurance and bulls more to speculate on gains.
“Normally we would expect to see the VIX continue to slide lower as the S&P 500 grinds up,” Greeley, who helps manage more than $450 million in volatility assets, said yesterday in an interview. “But as we get more extended in the recent trend and approach significant economic reports and central bank meetings, the VIX is capturing greater interest in out-of-the-money options, both calls and puts, as people bet on more stock gains as well as buy hedges.”
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