David Sokol, former Midamerican Energy Chairman David Sokol. Photographer: Daniel Acker/Bloomberg
U.S. stocks fluctuated at the end of the biggest first-quarter rally in 13 years as higher oil and metal prices drove commodity producers higher, while consumer companies and banks slumped.
Chevron Corp. (CVX) added 0.9 percent as oil headed for a third quarterly gain in New York. Berkshire Hathaway Inc. (BRK/A) lost 1.6 percent as David Sokol, once a candidate to succeed Warren Buffett as the head of the investment firm, resigned after helping to negotiate the acquisition of a company whose shares he had purchased. Carmax Inc. (KMX) slumped 7.1 percent after the largest U.S. seller of used cars said gross margin dropped.
The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,327.48 at 11:14 a.m. in New York. The Dow Jones Industrial Average rose 4.73 points, or less than 0.1 percent, to 12,355.34. Equity index futures retreated before the open of exchanges after first-time claims for unemployment insurance topped economists’ estimates.
“You had the weekly jobless claim numbers slightly weaker, so you don’t have anything helping the market here,” said Timothy Ghriskey, chief investment officer at the Solaris Group LLC in Bedford Hills, New York, which manages $2 billion. “The market also had quite a recovery here since mid-March and there could be some profit-taking today as we end the quarter.”
The S&P 500 advanced 5.6 percent in this quarter through yesterday and is poised for its biggest gain in the January- March period since 1998. An earthquake and tsunami in Japan and concern that revolts in the Middle East and northern Africa will curb global growth dragged the S&P 500 as much as 6.4 percent lower from its high for the year on Feb. 18 through March 16. The gauge has recovered most of that loss, trimming its drop from its 2011 high to 1.1 percent.
First-Quarter Gains
The S&P 500 usually climbs further following first-quarter gains similar to this year’s, according to Birinyi Associates Inc. The index rises about 7.1 percent in the final three quarters of years following January-March gains of 5 percent to 7 percent, Birinyi data dating back to 1928 show.
The benchmark gauge of U.S. stocks is trading for about 13.7 times its companies’ estimated operating earnings, compared with an average multiple of 18.1 times reported profits over the last decade, data compiled by Bloomberg show.
Jobless claims fell by 6,000 to 388,000 in the week ended March 26, Labor Department figures showed. The median forecast of economists in a Bloomberg survey was for a decline to 380,000 claims. The report comes before tomorrow’s monthly government report on non-farm payrolls, expected to show that the economy added 190,000 jobs in March.
European Bonds
Other reports showed U.S. factory orders unexpectedly fell 0.1 percent after a 3.3 percent gain in January, the Commerce Department said today. The Institute for Supply Management- Chicago Inc.’s business barometer fell in March. The Bloomberg Consumer Comfort Index rose for the first time in five weeks to minus 46.9 in the period ended March 27 from a seven-month low of minus 48.9 the prior week.
European stocks slipped as the bonds of the region’s most- indebted nations sank and the cost of insuring against a Portuguese default jumped to a record as Ireland prepared to give banks more aid, deepening concern over Europe’s debt crisis.
“There are clearly quite a few risks out there that might hurt growth, not just in the U.S. but also the rest of the world,” Philippe Gijsels, the Brussels-based head of research at BNP Paribas Fortis Global Markets, said in a Bloomberg Radio interview.
Energy Companies Gain
Energy companies in the S&P 500 added 0.4 percent as a group as oil jumped 1.8 percent to $106.18 a barrel amid concern that the Libyan conflict will prolong production cuts. Chevron advanced 0.9 percent to $108.93.
Berkshire Hathaway Class B shares fell 1.6 percent to $84.11. Sokol bought about 96,000 Lubrizol Corp. shares in January before recommending the company as a takeover target, Buffett, Berkshire’s chairman and chief executive officer, said late yesterday in a statement. Sokol had initiated confidential talks with Lubrizol the month before. Berkshire agreed to buy the firm for $9 billion on March 14.
Carmax slumped 7.1 percent to $32.13 after declining 7.9 percent, the most intraday since Dec. 21. The largest U.S. seller of used cars said gross margin for the fourth-quarter fell to 14.2 percent from 14.5 percent in the year-ago period.
American International Group Inc. (AIG) fell 2.7 percent to $35.09 after the Federal Reserve Bank of New York said it has declined the insurer’s $15.7 billion offer to purchase the residential-mortgage backed securities owned by the central bank’s Maiden Lane II LLC rescue fund.
To contact the reporter on this story: Cecile Vannucci in New York at cvannucci1@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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