By Cristina Alesci and Lynn Thomasson
March 6 (Bloomberg) -- U.S. stocks pared their advance as JPMorgan Chase & Co. cut estimates for Apple Inc., offsetting gains following government data showing the rate of American job losses slowed in February.
Apple fell 4 percent, leading technology companies to the steepest decline in the Standard & Poor’s 500 Index, as JPMorgan said the deepening recession is hurting profit at the iPhone maker. Wells Fargo & Co. gained 12 percent after cutting its dividend to save cash and saying business was “strong” in January and February.
The Standard & Poor’s 500 Index rose 0.5 percent to 685.95 at 10:29 a.m. in New York after rallying 2.4 percent earlier. The Dow Jones Industrial Average gained 43.57 points, or 0.7 percent, to 6,638.01.
The S&P 500 is headed for its fourth straight weekly decline as the worsening recession, a third government rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. helped drag the measure down 24 percent this year. The index has fallen 6.7 percent this week.
Wells Fargo jumped 11 percent to $9. The bank that bought Wachovia Corp. said the dividend cut will help it pay back the government and better absorb losses should the credit crisis worsen.
“That’s definitely affecting the market because the bank is basically saying that it won’t need more funding,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.5 billion in Elmira, New York.
General Electric Co. and Bank of America Corp. added more than 3.5 percent as the government said American employers eliminated 651,000 jobs in February, down from a revised 655,000 in January and compared with the median economist estimate of 650,000.
“Maybe we’re starting to get to where we’re at the high point of unemployment, and maybe we plateau from here,” said Jason Cooper, who helps manage $3 billion at 1st Source Investment Advisors in South Bend, Indiana. “We’ll probably have a good day today because you didn’t see any huge surprises.”
GE, which plunged to a 16-year low yesterday, added 5.1 percent to $7. Bank of America climbed 3.5 percent to $3.28. The lender has still tumbled more than 75 percent in 2009.
Energy stocks rose on higher oil prices as the U.S. dollar weakened against the euro, bolstering the appeal of commodities as an alternative investment. Crude oil for April delivery gained 3.1 percent to $44.97 a barrel in New York.
Chevron Corp. gained 3.7 percent to $58.53. Hess Corp. advanced 4 percent to $54.84. ConocoPhillips rose 2.7 percent to $36.34. Exxon Mobil Corp. added 2.6 percent to $63.81.
The jobless rate surged to 8.1 percent, more than forecast and the highest since December 1983, the Labor Department said today in Washington.
“Maybe it’s a relief and people saying it could have been a lot worst,” said Gary Shilling, an economist at A. Gary Shilling & Co. in Springfield, New Jersey, who predicted the recession that began in December 2007. He remains concerned that the economy is worsening and job losses will increase.
“Higher unemployment means the economy is more likely to drag on consumer spending, which feeds on itself and leads to weaker stocks, which also weighs on consumer sentiment,” Shilling added.
At yesterday’s close, more than $1.6 trillion has been erased from U.S. equities since Jan. 20 as mounting bank losses and rising unemployment convinced investors the recession is getting worse. The Dow average has fallen 20 percent since Inauguration Day, the fastest drop under a new president in at least 90 years, as investors speculated Barack Obama’s stimulus measures won’t revive the economy anytime soon.
H&R Block Inc. rose 6 percent to $18.36. The biggest U.S. tax preparer reported third-quarter earnings from continuing operations of 20 cents a share, double the average analyst estimate.
To contact the reporters on this story: Cristina Alesci in New York at calesci2@bloomberg.net; Lynn Thomasson in New York at lthomasson@bloomberg.net.
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