U.S. stocks advance on economic optimism amid stimulus efforts

‘Late Stages’

“We’re in the late stages of an accommodative Fed,” Andrew Slimmon, Chicago-based managing director of global investment solutions at Morgan Stanley Smith Barney, said by phone. His firm has $1.7 trillion in client assets. “They may change policy next year, so this stock market at some point is going to discount a change in policy. That’s going to temper the bull market in equities. I don’t think that’s going to happen soon. It’s likely going to be next year.”

The Chicago Board Options Exchange Volatility Index, or VIX, fell 4.1% to 12.59. The equity volatility gauge is down 2% for the week and its loss for the year is 30%.

Consumer discretionary stocks rallied, gaining 0.8%. Gap added 5.6% to $40.99. The largest U.S. apparel chain forecast first-quarter profit that topped analysts’ estimates. Earnings will be as much as 69 cents a share, exceeding the 56- cent profit projected by analysts on average.

Priceline, Nvidia

Priceline.com Inc. increased 3.8% to $765.41, the highest since May 1999. The largest U.S. online-travel agent by market value reported first-quarter profit and sales that exceeded analysts’ estimates as travelers used the site to book hotel rooms.

Nvidia climbed 4.5% to $14.54 after the maker of graphics processors said net income rose to $77.9 million, or 13 cents a share, in the quarter ended April 28. Sales increased 3.2% to $954.7 million. Analysts on average had forecast earnings of 10 cents on sales of $940.7 million.

About 72% of S&P 500 companies that have reported quarterly results since the start of the earnings season have exceeded analysts’ profit estimates, while 52% missed sales projections, according to data compiled by Bloomberg.

Warner Chilcott Plc soared 20% to $18.01 after Actavis Inc. said it’s in early-stage talks to buy the drugmaker. Actavis, the largest U.S. maker of generic drugs by market value, jumped 12%, the most in the S&P 500, to $119.86.

The discussions come just a few weeks after Actavis weighed a merger with fellow generics maker Valeant Pharmaceuticals International Inc., said people familiar with the process, who asked not to be named because the negotiations are private.

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments
comments powered by Disqus