U.S. stocks erase losses as Fed minutes focus on more job growth

Record High

The S&P 500 closed within 1% of a record high yesterday after Alcoa Inc. started the U.S. earnings season with results that beat analysts’ estimates. Yum! Brands Inc. reports earnings today, while JPMorgan Chase & Co. and Wells Fargo are among companies releasing results this week.

Data today showed inventories at U.S. wholesalers unexpectedly declined in May by the most since September 2011 as sales surged, pointing to a pickup in orders and production.

In China, a report from the General Administration of Customs in Beijing showed that exports fell 3.1% in June from a year earlier. The median estimate in a Bloomberg survey had called for a 3.7% gain. Imports dropped 0.7% last month, compared with the median projection of a 6% increase. China’s trade surplus with the U.S. slipped to $17.49 billion in June from $19.35 billion in May.

Volatility Gauge

The Chicago Board Options Exchange Volatility Index, or VIX, fell 0.7% to 14.25, after gaining as much as 1.9% earlier in the day. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80% of the time, reached a six-month high on June 20 and has fallen 30% since.

Health-care, utility and technology shares rose the most among 10 S&P 500 groups, climbing at least 0.3%.

Hewlett-Packard increased 2.6% to $26.12. Citigroup upgraded its recommendation for the computer maker to buy from sell and doubled its price estimate for the shares to $32. A survey among chief information officers signaled a “positive inflection” for HP’s services, Citigroup analysts said.

Family Dollar Stores jumped 8% to $69.07. The second-biggest U.S. dollar-store retailer reported fiscal third- quarter earnings of $1.05 a share, beating analyst estimates of $1.03 a share. Same-store sales climbed 2.9% as average transaction value and customer traffic increased for the quarter ended June 1.

Dollar General Corp. increased 5.2% to $54.51. Dollar Tree Inc. added 2.6% to $54.21.

Banks Slip

Financial companies lost 0.7%. U.S. regulators proposed a plan yesterday that said the eight largest firms would need to retain capital equal to at least 5% of assets, while their banking units would have to hold a minimum of 6%. Bank of America dropped 1% to $13.40. Wells Fargo sank 1.6% to $42.

Nabors Industries fell 6.1% to $15.03 after the company said it expects second-quarter operating income of $88 million to $91 million, below estimates of $110.1 million. The owner and operator of land drilling rigs cited adverse weather and intense competition, particularly for pressure pumping in the U.S. and Canada.

Best Buy Co. plunged 4.6% to $28.35. Cleveland Research Co. wrote in a report that a seasonal slowdown during the May to June period appears more pronounced this year for the world’s largest consumer-electronics retailer.

Fastenal Co. slid 3% to $45.70 after the seller of industrial and construction supplies reported second-quarter sales of $847.6 million, lower than analyst estimates for $857.4 million.

www.bloomberg.com

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