economic activity

U.S. stocks rise on better-than-estimated data, acquisitions

BLOOMBERG FILE PHOTO/SCOTT EELLS
STOCKS GAINED in the U.S. on better-than-estimated economic data and acquisitions announced nit he media and grocery industries.
Posted 6/13/13

NEW YORK - U.S. stocks gained, ending a three- day decline in the Standard & Poor’s 500 Index, amid better- than-forecast economic data and acquisitions in the media and grocery industries.

Gannett Co., the publisher of USA Today, jumped 31 percent after agreeing to buy Belo Corp. for about $1.5 billion. Belo surged 27 percent. Safeway Inc. soared 8.5 percent as the second-largest U.S. grocery chain agreed to sell its Canadian stores. DuPont Co. slid 0.4 percent after cutting its forecast.

The S&P 500 rose 1.2 percent to 1,632.04 at 3:09 p.m. in New York, after dropping as much as 0.3 percent earlier. The Dow Jones Industrial Average added 153.82 points, or 1 percent, to 15,149.05. Trading in S&P 500 stocks was 9 percent below the 30- day average during this time of day.

“It’s undeniable that the series of data are getting better,” Chris Bertelsen, chief investment officer at Global Financial Private Capital, a Sarasota-based private wealth firm with about $2 billion in assets under management, said in a phone interview. “The only issue for the market is we’re in a vacuum month. In other words, there are no earnings, there is nothing to latch onto other than an occasional number here and there and people are worried about the Fed tapering.”

Retail sales in the U.S. rose 0.6 percent last month, the biggest increase in three months, Commerce Department figures showed today. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4 percent advance. Data from a separate report indicated fewer Americans than forecast filed applications for unemployment benefits last week.

Scrutinizing data

Investors have been scrutinizing economic data to determine whether growth is strong enough to prompt the Federal Reserve to scale back stimulus measures. The S&P 500 has slipped 2.4 percent since May 21 as Fed Chairman Ben S. Bernanke said the central bank may scale back bond buying if the U.S. labor market “improves in a real and sustainable way.” Three years of earnings growth and stimulus from the Fed has helped push the gauge up 141 percent from its bear-market low in 2009.

Equities fell earlier as the World Bank said in a report the global economy will expand 2.2 percent this year, less than a January forecast for 2.4 percent growth and slower than last year’s 2.3 percent. It lowered its projection for developing economies and said the euro area’s gross domestic product will fall 0.6 percent.

Global slump

Stocks in Asia plunged, erasing the MSCI Asia Pacific Index’s 2013 advance and dragging Japan’s Nikkei 225 Stock Average into a bear market. The Hang Seng China Enterprises Index of Hong Kong-listed mainland firms slid 2.7 percent, and the Nikkei 225 tumbled 6.4 percent.

“The economy around the globe is slowing down so U.S. investors are certainly watching the data and hopefully see signs that the U.S. is not joining their friends in Europe and emerging markets,” Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC in Norfolk, Virginia, which oversees $2.5 billion, said by phone. “As markets get higher and higher, they can’t decide, ‘is the game over?’ Everybody wants to take their profits in this market, but they don’t want to miss the last 100 points.”

The Chicago Board Options Exchange Volatility Index, or VIX, slipped 10 percent today to 16.74. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-year low in March and has since surged 48 percent.

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