Earnings at the 131 companies that have reported so far grew 5.5%, while sales gained 2.2%, according to data compiled by Bloomberg. Some 73% of the companies have topped analysts’ profit estimates, while 53% have beaten on sales.
“You’re getting a significant number of beats again and you’re seeing it widespread again,” Sandy Lincoln, the Chicago- based chief market strategist in the U.S. with BMO Global Asset Management, which oversees about $120 billion, said in a telephone interview. “I think those surprise factors continue to cause the market go higher.”
The S&P 500 will rise past 1,800 as earnings and the U.S. economy improve, Michael Shaoul, the chairman and chief executive officer of New York-based Marketfield Asset Management LLC, told Bloomberg TV.
“We feel pretty good about equities,” said Shaoul in an interview from New York. “Corporate earnings point to a re- accelerating domestic economy. 1,800 is attainable.” He did not specify a time frame.
The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, was unchanged at 13.16. The measure has fallen 21% this month.
All 10 S&P 500 industry groups gained, with utilities, consumer-staples and materials stocks increasing more than 1.4% to lead the advance. The Morgan Stanley Cyclical Index rallied 1.8% to a record.
Walt Disney Co., the world’s largest entertainment company, rose 2%, the most in the Dow, to a record $68.99. Alcoa Inc., the biggest U.S. aluminum producer, jumped 9.8% to $9.44 for the largest advance in two years.
An S&P index of homebuilders climbed 3% amid the rise in construction spending and a decline in Treasury 10-year note yields. All 11 members in the Supercomposite Homebuilding Index gained. Lennar Corp. advanced 4.6% to $36.31 while D.R. Horton Inc. rose 3.2% to $19.26.
Whirlpool climbed 11% to $145.47. The world’s largest appliance maker lifted its forecast for earnings this year to as much as $10.10 a share from an earlier estimate of no more than $10. That compared with the analyst estimate of $9.97.
Freeport-McMoRan jumped 4% to $36.43. The largest U.S. miner reported third-quarter profit that beat analysts’ estimates as copper costs were better than expected.
The Bloomberg U.S. Airlines Index advanced 2.2% to its highest level since October 2007. Delta Air Lines Inc., whose stock is the top performer this year among major U.S. carriers, added 3.1% to a record $25.47. The airline’s quarterly profit beat analysts’ estimates as more people flew at higher fares and fuel prices declined.
Transocean Ltd. jumped 5.6% to $49.18. The offshore drilling contractor will replace Dell Inc. in the S&P 500, the index provider said in a statement late yesterday. Revisions in the benchmark’s composition prompt some money managers to shift holdings to match the equity index.
VMware Inc. climbed 3.8% to $85.75. The biggest maker of software that lets computers run different operating systems reported quarterly profit that beat analysts’ forecasts.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.