U.S. stocks advance to records amid Fed stimulus speculation
U.S. EQUITIES MARKETS opened near record highs Wednesday, as investors expected the Federal Reserve to keep its bond-purchasing program in place, while at the same time, more than two-thirds of companies have reported earnings gains in the third quarter.
BLOOMBERG NEWS PHOTO/SCOTT EELLS
By Namitha Jagadeesh and Lu Wang Bloomberg News
NEW YORK - U.S. stocks advanced, with the Standard & Poor’s 500 Index poised for a record close, as investors awaited data this week on jobs and economic growth for clues on when the Federal Reserve will cut stimulus.
Time Warner Inc. gained 2.5 percent after reporting profit that surpassed analysts’ estimates. Ralph Lauren Corp. climbed 3.7 percent after the apparel maker boosted the lower end of its sales forecast and increased its dividends. Tesla Motors Inc. tumbled 11 percent as vehicle sales missed some analysts’ estimates. Abercrombie & Fitch Co. slumped 5.2 percent to $35.75 after posting sales that trailed expectations.
The S&P 500 rose 0.5 percent to 1,772.38 at 10:02 a.m. in New York, surpassing its previous record of 1,771.95 on Oct. 29. The Dow Jones Industrial Average added 107.23 points, or 0.7 percent, to 15,725.45. A close at that level would top the gauge’s all-time high set a week ago. Trading in S&P 500 stocks was 3.8 percent below the 30-day average during this time of the day.
“The Fed is in no rush to withdraw support,” said Manish Singh, who helps oversee $2 billion as head of investments at Crossbridge Capital in London. “What will make the Fed move toward reducing stimulus is economic growth, a lower unemployment rate and higher inflation rate all taken together, and we’re not there yet.”
Investors are watching data to gauge the health of the U.S. economy after the Fed said last week it needs to see more evidence of sustained improvement before slowing the pace of its $85 billion monthly bond purchases. The S&P 500 has surged 24 percent this year, heading for the best annual performance since 2003, as company earnings beat forecasts and the central bank maintained stimulus measures.
A report Wednesday showed the Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, increased 0.7 percent in September. The median forecast of economists surveyed by Bloomberg called for a gain of 0.6 percent. The report, which was due Oct. 18, was postponed because of last month’s government shutdown.
Data later this week may show the U.S. economy slowed in the third quarter and employers hired fewer workers in October.