U.S. stocks rose, after the Standard & Poor’s 500 Index climbed for four straight weeks, as Exxon Mobil Corp. and U.S. Steel Corp. led a commodity rally while investors awaited data on employment and economic growth.
Exxon Mobil, the world’s largest energy company, increased 2.4%. U.S. Steel and AK Steel Holding Corp. gained more than 4.2% on an industry upgrade by Goldman Sachs Group Inc. Kellogg Co. climbed 0.7% after announcing it will reduce its global workforce by seven% as part of a four- year cost-saving plan. BlackBerry Ltd. tumbled 16% as Fairfax Financial Holdings Ltd. walked away from a $4.7 billion takeover plan.
The S&P 500 gained 0.3% to 1,766.11 at 3:29 p.m. in New York. The Dow Jones Industrial Average added 11.13 points, or 0.1%, to 15,626.68. Trading in S&P 500 stocks was 9.1% below the 30-day average during this time of the day.
“The path of least resistance continues to be up,” James Dunigan, who helps oversee $118 billion as chief investment officer in Philadelphia at PNC Wealth Management, said by phone. “In general, the earnings picture is good. Valuations with the market at these levels are probably in the fair range. As you get into year-end portfolio adjustments, playing on that momentum we’ll likely see the market continue to do well here as opposed to selling off. I think if there are any sort of corrections they’ll be short lived in this environment.”
The equity gauge jumped 4.5% in October as the Federal Reserve decided to continue $85 billion in monthly bond purchases, and companies beat earnings forecasts. Investors are watching data to gauge the health of the U.S. economy after the Fed last week said it needs to see more evidence of sustained improvement before reducing the pace of its monthly bond purchases.
Seventy-six% of the 373 S&P 500 companies that have reported earnings so far have beaten analysts’ estimates, according to data compiled by Bloomberg. Income for the broad index probably increased 4.1% in the third quarter, according to analyst estimates compiled by Bloomberg.
The S&P 500 has surged more than 160% from a bear market low in 2009 as the central bank introduced unprecedented monetary stimulus to spur growth. The benchmark gauge is up 23.8% this year, poised for the best annual gain since 2003.
The rally pushed the index’s price-to-earnings ratio up 18% this year to 16.7, near the highest level in more than three years, data compiled by Bloomberg show. The 15-year average multiple is 19.3.
The economy probably slowed in the third quarter and employers hired fewer workers in October, economists project reports to show this week.