Most U.S. stocks rose, as the Standard & Poor’s 500 Index extended its record level, following data last week that showed American employers added more workers than forecast in April.
Financial stocks rallied the most out of 10 S&P 500 groups, as Bank of America Corp. climbed 4.6%. Cliffs Natural Resources Inc. added 6% after being raised to outperform from market perform by FBR Capital Markets. Humana Inc. added 2.2% as its rating was boosted by JPMorgan Chase & Co. Tyson Foods Inc. slumped 3.7% after posting second- quarter profit and sales that missed estimates.
The S&P 500 rose 0.2% to 1,617.76 at 3:31 p.m. in New York. The Dow Jones Industrial Average lost 0.96 point, or less than 0.1%, to 14,973. About four stocks rose for every three that fell on U.S. exchanges. Trading of S&P 500 stocks was 9.2% below the 30-day average at this time of day.
“The market’s still feeding off the positive jobs number and the central bank easing that’s been going on,” Sean Lynch, the Omaha, Nebraska-based global investment strategist for Wells Fargo Private Bank, said by telephone. His firm oversees about $170 billion. “We still like equities. If you look at the landscape of alternatives and opportunities out there, equities are probably the more favorable asset class right now.”
The S&P 500 jumped 2% last week as U.S. payrolls expanded by 165,000 workers last month. The median forecast of economists in a Bloomberg survey called for an increase of 140,000 positions. Global equities also rose as the European Central Bank cut its main refinancing rate. Of the 407 companies in the S&P 500 that have reported profit so far, 73% exceeded analysts’ earnings predictions while 53% missed on sales, data compiled by Bloomberg show.
U.S. stocks are in the fifth year of a bull market, as better-than-estimated corporate earnings and three rounds of bond purchases by the Federal Reserve has driven the S&P 500 up 139% from a 12-year low in March 2009. The benchmark equity gauge traded above 1,600 for the first time last week, while the Dow briefly surpassed 15,000 on May 3 and ended the week 1.8% higher.
The Chicago Board Options Exchange Volatility Index, or VIX, fell 0.2% to 12.82 after falling 5.6% last week. The equity volatility gauge is down 29% for the year.
Birinyi Associates Inc., which predicted the S&P 500 would reach 1,600, purchased options betting on more gains. The firm, among the first to advise buying U.S. stocks before the bull market began in 2009, said the S&P 500 may climb 18% to 1,900 should it conform to bull markets that began in 1982 and 1990.