U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a fifth straight day, as exports from China topped forecasts and corporate acquisitions fueled optimism in the world’s largest economy.
Molex Inc. jumped 32% after agreeing to be acquired by Koch Industries Inc. Apple Inc. rose 1.7% before an investor event tomorrow where the company will unveil new models of the iPhone. An S&P index of homebuilders jumped 5.2%, the most in almost two months. Delta Air Lines Inc. rallied 8.2% as S&P Dow Jones Indices said the world’s second-largest carrier will replace BMC Software Inc. in the S&P 500.
The S&P 500 gained 1% to 1,670.98 at 2:51 p.m. in New York, poised for the highest closing level since Aug. 14. The Dow Jones Industrial Average added 152.48 points, or 1%, to 15,074.98. Trading in S&P 500 stocks was 3.9% lower than the 30-day average at this time of day.
“We’re latching on to the better trading in Asia after the Chinese data,” Robert Pavlik, New York-based chief market strategist at Banyan Partners LLC, said by phone. His firm manages about $4.4 billion. “The fact that nothing has transpired in Syria is also a positive in a strange sense. The Street is somewhat relieved that the U.S. hasn’t engaged in military action yet.”
The S&P 500 advanced 1.4% last week as data showed signs of economic growth and investors weighed prospects for central bank stimulus cuts amid tensions over Syria. The benchmark for U.S. equities retreated as much as 4.6% from the record high on Aug. 2. It has rebounded 2.5% from a two-month low on Aug. 27.
Chinese exports climbed 7.2% in August from a year earlier, the General Administration of Customs said in Beijing yesterday. That compared with the 5.5% median estimate of 46 economists surveyed by Bloomberg and July’s 5.1% gain. Imports increased a less-than-estimated 7%.
“Economic data out of Asia seems to be supporting markets, but no doubt investors will remain vigilant in the short term about any developments in the Syria situation and the next move from the Federal Reserve,” James Butterfill, who helps oversee $44 billion as head of global equity strategy at Coutts & Co. in London, said by phone.
The equities gauge has rallied 17% this year as the Fed continued to provide stimulus to the economy. A report Sept. 6 showed payrolls in the U.S. climbed less than projected in August and gains in the prior two months were revised downward, fueling speculation that any Fed move to taper its stimulus program will be limited.
Fed Bank of San Francisco President John Williams, who has backed record stimulus, said recent economic data signal gradual job market improvement in line with his expectations. The central bank will probably adopt a gradual, “multi-step” plan for tapering bond buying, Williams said.
Economists forecast the central bank will reduce its monthly $85 billion in asset buying by $10 billion at its meeting on Sept. 17-18, according to the median of 34 responses in a Bloomberg News survey of economists.
President Barack Obama intensified his campaign to persuade a reluctant American public to back military action against Syria as Bashar al-Assad threatened retaliation “direct and indirect” if the U.S. attacks. Russia urged Syria to give up its stockpile of chemical weapons if doing so would help avoid a U.S.-led military strike, Foreign Minister Sergei Lavrov said.
Obama is scheduled to deliver a national address at 9 p.m. tomorrow. The Senate is expected to vote on a resolution by the end of this week and the House of Representatives will probably debate the proposal next week.
The Chicago Board Options Exchange Volatility Index, or VIX, dropped 2.9% to 15.39. The equity volatility gauge has cut its decline this year to 15% after rallying 30% since Aug. 5.
Raw-materials producers, industrial and technology shares rose at least 1.3% to lead the S&P 500’s 10 main groups.
Molex soared 32% to $38.60 for the biggest gain in the S&P 500. The maker of electronic components for products such as Apple’s iPhone agreed to a $7.2 billion acquisition by Koch Industries, the holding company controlled by the billionaire Koch brothers.
Koch will buy Molex’s shares for $38.50 apiece, a 31% premium over the publicly traded common stock, according to a statement today.
The U.S. market is poised for the busiest month of takeovers in more than six years. About $160 billion of mergers and acquisitions have been announced since the end of August, the most since July 2007, data compiled by Bloomberg show.
Among other deals today, Neiman Marcus Inc. agreed to sell itself to Ares Management LLC and the Canada Pension Plan Investment Board for $6 billion. Neiman’s private-equity owners TPG Capital and Warburg Pincus LLC paid about $5.1 billion for the Dallas-based retailer in 2005.
Apple added 1.7% to $506.62. The company will unveil a less expensive version of the iPhone and an upgrade of the iPhone 5 tomorrow, people with knowledge of the matter have said. The device is the country’s top-selling smartphone. FBN Securities Inc. raised its priced target on the stock to $600 from $575 today.
Delta advanced 8.2%, the most since April, to $21.52. The airline will join the S&P 500 after the close of trading tomorrow, according to a statement from S&P Dow Jones Indices on Sept. 6, making Atlanta-based Delta the second carrier in the index after Southwest Airlines Co. BMC is leaving the gauge after being bought by Bain Capital LLC.
An S&P index of homebuilders jumped 5.3% as Hovnanian Enterprises Inc. reported a profit for its fiscal third quarter as sales and prices increased amid a nationwide housing recovery.
Hovnanian, the best-performing U.S. homebuilder stock in the past year, rose 3% to $5.19. PulteGroup Inc., the largest U.S. homebuilder by market value, added 7.6% to $16.64 for the second-biggest gain in the S&P 500. D.R. Horton Inc. advanced 6.3% to $19.24.
Crown Castle International Corp. climbed 2.4% to $72.22. The provider of infrastructure for wireless communications said it will take steps to qualify as a real estate investment trust for tax purposes.
Expedia Inc. climbed 2.1% to $50.73. The provider of online travel services was raised to buy from neutral by Lazard Capital Markets LLC.
Refiners fell after Simmons & Co. downgraded the sector, citing the likelihood of significant cuts to third-quarter earnings forecasts. Tesoro Corp. lost 0.9% to $46.34 while Marathon Petroleum Corp. slipped 1.8% to $69.59. Both had their recommendations reduced to neutral from overweight.