U.S. stocks rise as S&P 500 annual gain nears biggest since 2003

Earnings Scorecard

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.

Volatility Gauge

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.

Airline Stocks

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.

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