U.S. stocks rise as earnings top estimates before Fed meeting

‘More Stability’ 

“We’re seeing some more stability in some of the international markets for exporters and continued modest improvement here in the United states,” Paul Mangus, head of equity strategy and research for Wells Fargo Private Bank in Charlotte, North Carolina, said in a phone interview. His firm manages $170 billion. “You have revenue coming in sluggish, but that was pretty much as expected. Margins have come in a little higher than expectations, so there’s a reason for an improvement in investor confidence.”

The Chicago Board Options Exchange Volatility Index, the gauge known as VIX that measures options traders’ estimate of future price swings in the S&P 500, rose 0.9% to 13.43. The gauge has lost 19% so far this month.

AT&T Rally

Nine of 10 main S&P 500 groups advanced today, with phone and consumer-staples companies rising at least 0.8% to pace gains. AT&T Inc. jumped 2.3% to $36.39 for the biggest advance in the Dow.

Masco climbed 3.5% to $21.65. The company said it had sales of $2.2 billion last quarter, beating the average estimate in a Bloomberg poll of analysts for revenue of $2.1 billion. Adjusted earnings of 27 cents a share also beat projections.

Pfizer rose 1.7% to $31.28. Higher sales of its top vaccine and pain drugs also boosted profit. Pfizer is pushing to expand sales of Prevnar, a pneumococcal vaccine and its second- biggest product, since losing marketing exclusivity for Lipitor, once the world’s top-selling drug.

Xylem surged 12% to $32.41 for the biggest gain in the S&P 500 and the most since being spun off from ITT Corp. two years ago. A 6% rise in orders in the third quarter, an ozone project in China and a pumping and control system for the Singapore Transport Authority helped Xylem post earnings and sales that beat analysts’ estimates

Index Change

Michael Kors Holdings Ltd. climbed 1.2% to $77.33. The luxury-goods company founded by the designer of the same name will replace NYSE Euronext in the S&P 500 after the close of trading on Nov. 1, S&P said. NYSE Euronext, the biggest U.S. stock exchange owner, is being acquired by Atlanta-based IntercontinentalExchange Inc.

International Business Machines Corp. rose 2.4% to $181.51 for the biggest advance in the Dow. The world’s largest computer-services firm added $15 billion to its stock buyback fund. The company now has $20.6 billion in its repurchase program, and it will request more next October, it said.

Apple Inc. lost 1.4% to $522.60. The maker of the iPhone said revenue in the current quarter will be $55 billion to $58 billion, compared with the $55.5 billion average of analysts’ estimates. Gross margins will be 36.5% to 37.5%, versus the 38% projection.

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