Stocks rise with gold as dollar falls on earnings, Fed bets

Airlines Climb

The Bloomberg U.S. Airlines Index climbed 2.7%, heading for the highest closing level since 2007. Southwest Airlines Co. added 3.3% after earnings and operating revenue met forecasts. United Continental Holdings Inc. increased 1.4% after the world’s largest airline promised unspecified “numerous actions” to boost revenue and efficiency as third-quarter profit trailed analysts’ estimates.

Better-than-expected earnings and monetary stimulus from the Fed have driven the S&P 500 up 23% this year. The 16-day partial government shutdown weighed on fourth- quarter growth and will prompt Fed policy makers to wait until March before starting to scale back the $85 billion of monthly bond purchases, a Bloomberg survey showed last week.

The S&P 500 rallied to a record on Oct. 22 after payrolls in the U.S. climbed by less than forecast in September, adding to speculation the Fed will delay curtailing its monetary stimulus. Policy makers are scheduled to meet Oct. 29-30, when they will evaluate the strength of the recovery with a less complete set of figures than usual due to the suspension of reports and collection of data during the government closure.

The Commerce Department today reported the trade deficit in the U.S. was little changed. More Americans than forecast filed applications for unemployment benefits last week as California continued to work through a backlog. The Markit Economics preliminary index of U.S. manufacturing decreased to 51.1 in October from a final reading of 52.8 at the end of the previous month, the London-based group said today.

China Manufacturing

A preliminary gauge of Chinese manufacturing strengthened to 50.9, compared with a projected 50.4 reading, according to data from HSBC Holdings Plc and Markit Economics and a Bloomberg survey.

The Stoxx Europe 600 Index rose for the 10th time in 11 days. Daimler AG, the maker of Mercedes-Benz cars, and ABB Ltd., the world’s largest maker of power transformers, climbed more than 3.3% after profit beat projections. Celesio jumped 5.4% after McKesson agreed to buy the German drug wholesaler.

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