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

U.S. stocks climbed toward another record and gold advanced while the dollar weakened as corporate earnings topped estimates and signs of slower economic growth fueled bets the Federal Reserve will maintain stimulus.

The Standard & Poor’s 500 Index (CME:SPZ13) rose 0.3% to 1,752.21 at 3:38 p.m. in New York, bringing it three points away from an all-time high. The Stoxx Europe 600 Index gained 0.4%, while Chinese stocks fell as the benchmark money-market rate jumped the most since June. Gold climbed 1.2% while oil reversed an earlier loss. Treasury 10-year note yields traded near a three-month low. The dollar touched a two-year low against the euro.

The U.S. trade deficit was little changed in August as imports and exports stalled, data showed today. U.S. factory output expanded in October at a slower pace than forecast, while another report showed euro-area services and manufacturing grew less than estimated. Chinese manufacturing strengthened this month more than anticipated. Microsoft Corp. and Amazon.com Inc. are among U.S. companies reporting earnings today.

“Earnings will improve,” David James, director of research at Alpha, Ohio-based James Investment Research Inc., said in a phone interview. His firm oversees more than $4.5 billion. “We want to look at the quality of these earnings as far as looking at revenues and making sure there is actual growth and not just manufactured growth.”

About 47 companies in the S&P 500 are scheduled to post results today, the busiest day of the third-quarter reporting season. Of the 212 companies that have released earnings so far, 76% exceeded analysts’ predictions for profit, while 53% beat sales estimates, according to data compiled by Bloomberg.

Earnings Season

Earnings for members of the gauge probably increased 2.5% in the third quarter as sales climbed 2.2%, according to analysts’ estimates compiled by Bloomberg.

Homebuilders rallied 3.4% as a group today as PulteGroup Inc.’s profit surged. Ford Motor Co. gained 1.4% after earnings beat projections. McKesson Corp. jumped 4.5% after boosting its annual forecast and agreeing to buy Germany’s Celesio AG for about 3.9 billion euros ($5.4 billion). Symantec Corp. sank 13% as the maker of security software forecast sales and profit that fell short of analysts’ estimates.

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