U.S. stocks gained, ending a three- day decline in the Standard & Poor’s 500 Index, amid better- than-forecast economic data and acquisitions in the media and grocery industries.
Gannett Co., the publisher of USA Today, jumped 31% after agreeing to buy Belo Corp. for about $1.5 billion. Belo surged 27%. Safeway Inc. soared 8.5% as the second-largest U.S. grocery chain agreed to sell its Canadian stores. DuPont Co. slid 0.4% after cutting its forecast.
The S&P 500 rose 1.2% to 1,632.04 at 3:09 p.m. in New York, after dropping as much as 0.3% earlier. The Dow Jones Industrial Average added 153.82 points, or 1%, to 15,149.05. Trading in S&P 500 stocks was 9% below the 30- day average during this time of day.
“It’s undeniable that the series of data are getting better,” Chris Bertelsen, chief investment officer at Global Financial Private Capital, a Sarasota-based private wealth firm with about $2 billion in assets under management, said in a phone interview. “The only issue for the market is we’re in a vacuum month. In other words, there are no earnings, there is nothing to latch onto other than an occasional number here and there and people are worried about the Fed tapering.”
Retail sales in the U.S. rose 0.6% last month, the biggest increase in three months, Commerce Department figures showed today. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4% advance. Data from a separate report indicated fewer Americans than forecast filed applications for unemployment benefits last week.
Investors have been scrutinizing economic data to determine whether growth is strong enough to prompt the Federal Reserve to scale back stimulus measures. The S&P 500 has slipped 2.4% since May 21 as Fed Chairman Ben S. Bernanke said the central bank may scale back bond buying if the U.S. labor market “improves in a real and sustainable way.” Three years of earnings growth and stimulus from the Fed has helped push the gauge up 141% from its bear-market low in 2009.
Equities fell earlier as the World Bank said in a report the global economy will expand 2.2% this year, less than a January forecast for 2.4% growth and slower than last year’s 2.3%. It lowered its projection for developing economies and said the euro area’s gross domestic product will fall 0.6%.