U.S. stocks rose on data showing improvement in global manufacturing and the American labor market amid a three-hour trading halt on the Nasdaq Stock Market after a computer error.
A gauge of homebuilders added 2.1% after a report showed house prices rose 7.7% in June from a year ago. Yahoo Inc. rallied 3.2% as data showed it attracted more U.S. visitors than Google Inc. in July. Hewlett-Packard Co. slid 12% after the personal computer maker’s quarterly profit forecast missed some analysts’ estimates. Abercrombie & Fitch Co. plunged 17% as second-quarter earnings that fell short of forecasts.
The S&P 500 gained 0.9% to 1,657.70 at 3:31 p.m. in New York. The Dow Jones Industrial Average rose 78.50 points, or 0.5%, to 14,976.05. Trading in S&P 500 stocks was 29% below the 30-day average at this time of day.
Computer errors shook American equity markets again as malfunctioning software that feeds data between exchanges prompted Nasdaq to halt trading in stocks and options today. The Nasdaq rose 0.9% to 3,631.17 today before stopped around 12:20 p.m. in New York. Trading resumed at 3:25 p.m., with the Nasdaq up 0.9% to 3,632.93.
“The employment numbers were encouraging and showed a continuation of slow growth in employment,” Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, North Carolina, said in a telephone interview. His firm manages $170 billion. “There are signs of stabilization in China and improvement in Europe, which could help U.S. multinationals in the long run.”
Buying and selling in many of the country’s most heavily traded shares from Apple Inc. to Intel Corp. and Facebook Inc. ground to a virtual halt today after the second-biggest stock market operator in the U.S. halted transactions in what it calls Tape C, which comprises all Nasdaq-listed securities.
The disruption, just two days after options markets were roiled by mistaken trades sent by Goldman Sachs Group Inc., is the latest in a series of computer malfunctions that have raised questions about the reliability of electronic markets.
Nasdaq faced criticism last year when it mishandled the public debut of Facebook, causing hundreds of millions of dollars in losses for its member firms. The company’s shares fell 3.4% to $30.47, after earlier rising as much as 1.1%.
The S&P 500 fell 0.6% yesterday to the lowest level since July 8 as minutes from the Federal Reserve’s July meeting showed officials support stimulus cuts this year if the economy improves. The Dow declined for a sixth day, the longest losing streak in 13 months.
Fed stimulus helped push the S&P 500 up as much as 153% from its March 2009 low, as better-than-estimated corporate earnings also fueled equity gains. Of the 483 companies in the S&P 500 that have reported quarterly earnings this period, 71% surpassed profit estimates, Bloomberg data show.
The fewest workers in more than five years applied for U.S. unemployment benefits over the past month, indicating the labor market continues to improve.
The number of claims in the month ended Aug. 17 declined to 330,500 a week on average, the least since November 2007, a Labor Department report showed today in Washington. Compared with a week earlier, claims rose by 13,000 to 336,000, in line with the median forecast of 48 economists surveyed by Bloomberg.
The Fed has said it plans to keep benchmark interest rates near zero at least as long as the unemployment rate is above 6.5% and inflation is no more than 2.5%.
Speculation about the stimulus has whipsawed stocks since May, when the Fed first indicated cuts could start this year. The S&P 500 tumbled 5.8% from a record high on May 21 through June 24. It then rebounded as much as 8.7% to close at its latest record of 1,709.67 on Aug. 2. The index finished yesterday 3.9% below the all-time high.
The Chicago Board Options Exchange Volatility Index, or VIX, dropped 7.3% to 14.77 today, after jumping yesterday to the highest since July 3. The equity volatility gauge has retreated 18% this year as the S&P 500 has rallied 16% on growing signs economic growth is improving.
Data today showed the Conference Board’s index of leading economic indicators increased 0.6% in July. The median forecast in a Bloomberg survey of economists called for a 0.5% advance.
Overseas reports showed Germany led growth in manufacturing and services in the euro area, while a gauge for China’s factory output unexpectedly showed expansion.
Energy stocks rallied 1.4% and materials producers jumped 1% as all 10 main industries in the S&P 500 advanced today.
Cliffs Natural Resources Inc. surged 6.3% to $22.55 and Freeport-McMoRan Copper & Gold Inc. added 4% to $31.57 to pace gains among miners. Industrial metals rallied on the data from China, the world’s biggest consumer of commodities.
A factory index released by HSBC Holdings Plc and Markit Economics showed a preliminary reading of 50.1, exceeding the 48.2 median estimate of economists in a Bloomberg survey. Readings above 50 signal growth.
Barrick Gold Corp., the world’s biggest producer of the precious metal, gained 2.8% to $19.60. Gold Fields Ltd. said it will pay $300 million for Barrick’s Granny Smith, Lawlers and Darlot gold mines in Western Australia.
The S&P Supercomposite Homebuilding Index rose 2.1%. Ten of 11 members advanced, after the Federal Housing Finance Agency report showed home prices extending a recovery. Prices climbed 0.7% in the month on a seasonally adjusted basis from May.
Toll Brothers Inc. gained 2.9% to $32.55 and PulteGroup Inc. climbed 1.6% to $16.35.
Yahoo, the biggest U.S. Web portal, added 3.2% to $27.92. More than 196 million users spent time on Yahoo’s websites in July, ComScore Inc. said. That’s 4.3 million more than Google Inc. and the first time Yahoo’s Web traffic surpassed that of the world’s most popular search engine since May 2011.
GameStop Corp. jumped 9.7% to $52.25 for the biggest gain in the S&P 500. The largest specialty retailer of video games gained the most in a year after raising its full-year profit forecast ahead of the release of new consoles from Sony Corp. and Microsoft Corp.
Hewlett-Packard tumbled 12% to $22.29 after forecasting earnings excluding some items of 98 cents to $1.02 a share for the fiscal fourth quarter. Analysts had predicted $1.01 on average, according to estimates compiled by Bloomberg.
Abercrombie & Fitch plunged 17% to $38.62, the biggest drop since November 2011. The retailer reported second- quarter earnings of 16 cents a share, compared with the average analyst estimate of 29 cents and its own forecast of at least 28 cents.
Sears Holding Corp. slumped 8.3% to $39.70, headed for the lowest close this year. The retailer controlled by Edward Lampert said its second-quarter loss widened to $194 million as its loyalty program members used more discounts. Members of the company’s Shop Your Way program accounted for more than 65% of sales at Sears operations and Kmart in the quarter. Sales fell 6.3% to $8.87 billion.