By Rita Nazareth - Nov 9, 2011 4:42 AM GMT+0700
Nov. 8 (Bloomberg) -- David Donabedian, chief investment officer at Atlantic Trust Group Inc., and Thomas Perkins, portfolio manager at Perkins Investment Management LLC, talk about investment strategy, the outlook for large-capitalization stocks and emerging markets. They speak with Adam Johnson and Lisa Murphy on Bloomberg Television's "Street Smart." Bloomberg's Matt Miller also speaks. (Source: Bloomberg)
Nov. 8 (Bloomberg) -- John Mauldin, president of Millennium Wave Investments LLC, talks about the outlook for equities and his investment strategy. He speaks with Bloomberg's Deirdre Bolton on Bloomberg Television's "Money Moves." (Source: Bloomberg)
Nov. 8 (Bloomberg) -- Neel Kashkari, head of global equities at Pacific Investment Management Co., talks about the outlook for global financial markets. Kashkari speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Nov. 8 (Bloomberg) -- Bloomberg's Deborah Kostroun reports on the performance of the U.S. equity market today. Stocks rose, sending the Standard & Poor’s 500 Index higher a second day, as Prime Minister Silvio Berlusconi’s offer to resign boosted optimism Italy will appoint a new leader who can tame the debt crisis. Bloomberg's Pimm Fox also speaks. (Source: Bloomberg)
U.S. stocks rose, sending the Standard & Poor’s 500 Index higher a second day, as Prime Minister Silvio Berlusconi’s offer to resign boosted optimism Italy will appoint a new leader who can tame the debt crisis.
All 10 groups in the S&P 500 advanced as financial, energy and technology companies rallied at least 1.1 percent. JPMorgan Chase & Co. (JPM), Occidental Petroleum Corp. (OXY) and Intel Corp. (INTC) added more than 1.9 percent. A gauge of homebuilders in S&P indexes jumped 3.8 percent as Toll Brothers Inc. (TOL) gained 7.4 percent after the luxury-home builder said revenue increased.
The S&P 500 climbed 1.2 percent to 1,275.92 as of 4 p.m. New York time, after falling as much as 0.5 percent earlier today. The benchmark gauge of American equities has increased 1.8 percent in two days. The Dow Jones Industrial Average advanced 101.79 points, or 0.8 percent, to 12,170.18 today.
“Berlusconi is a bit of a cartoon character with respect to world leaders,” Michael Holland, chairman and founder of New York-based Holland & Co., said in a telephone interview. His firm oversees more than $4 billion. “There’s a handful of adults in Europe who are working very hard. The market has a clear view that Berlusconi is not helpful with what Europe needs moving into the future. He is part of the problem, not the solution.”
President Giorgio Napolitano said Berlusconi has agreed to quit after the parliament approves the country’s austerity plans next week. The government has yet to present the final text of the amendment to the budget law with the austerity measures. Berlusconi’s resignation came after he failed to muster an absolute majority on a routine parliamentary ballot, obtaining only 308 votes in the 630-seat Chamber of Deputies today.
‘Not Effective’
“The reality is Berlusconi is not effective and he needs to go,” Madelynn Matlock, who helps oversee about $14.5 billion at Huntington Asset Advisors in Cincinnati, said in a telephone interview. “It seems to me that any rational prime minister would realize that he shouldn’t be prime minister of Italy anymore.”
Greece prepared for a new prime minister to lead an interim government of national unity as state-run NET TV and To Vima newspaper reported that former central banker Lucas Papademos will accept the post. Prime Minister George Papandreou said a Greek national unity government will be named “soon” and told his ministers to get ready to resign, spokesman Elias Mosialos said today in Athens.
Stocks rose yesterday as the European Central Bank’s Juergen Stark said the region’s debt crisis will be under control in two years. Benchmark gauges dropped last week amid concern Europe’s crisis was worsening as the Group of 20 nations failed to agree on increasing the International Monetary Fund’s resources to fight the crisis.
Banks Rally
The KBW Bank Index (BKX) rose 2.4 percent, reversing an earlier loss of as much as 0.1 percent. The Morgan Stanley Cyclical Index added 1.2 percent on speculation that steps taken by European leaders to solve their debt crisis will avert a global recession. The Dow Jones Transportation Average of 20 stocks gained 1.2 percent. JPMorgan advanced 2.3 percent to $35.02. Occidental Petroleum climbed 2.8 percent to $101.29. Intel rose 1.9 percent to $24.75.
Toll Brothers gained 7.4 percent to $19.43, the highest level since August. Homebuilding revenue for the three months ended Oct. 31 rose to $427.7 million from $402.6 million a year earlier, the Horsham, Pennsylvania-based company said today in a statement. Analysts expected Toll to have revenue of $414.2 million, the average of 15 estimates in a Bloomberg survey.
Priceline.com Jumps
Priceline.com Inc. (PCLN) surged 8.6 percent, the most in the S&P 500, to $552.85. The biggest U.S. online travel agency reported third-quarter profit and sales topped analyst estimates. Excluding some costs, profit was $9.95 a share, compared with the $9.30 average of 20 analyst estimates compiled by Bloomberg.
Rockwell Automation Inc. (ROK) jumped 6.5 percent to $74.33 after the maker of factory-automation software projected 2012 sales growth that may exceed analysts’ estimates on demand from automobile, food and beverage producers.
DryShips Inc. advanced 9.9 percent to $2.99. The Greek owner of deep-water drilling rigs and vessels that haul iron ore and coal reported third-quarter earnings excluding some items of 16 cents a share, beating the average analyst estimate by 13 percent.
Activision Blizzard Inc. (ATVI) added 1.4 percent to $13.93. The world’s largest video-game maker released its eighth “Call of Duty” game, “Modern Warfare 3.” The game may sell as many as 6 million copies in the first day, according to Arvind Bhatia, an analyst at Sterne Agee & Leach Inc.
New Titles
After the close of regular trading, the company reported profit that beat analysts’ estimates and raised its full-year forecast, citing new titles including the new “Call of Duty.”
The S&P 500’s failure to keep pace with record corporate earnings may signal the benchmark equity gauge will surge if it returns to its historical relationship with profits.
Four years ago, when the S&P 500 lagged behind trailing 12- month corporate profits, the measure went on to reach an all- time high of 1,565.15. While combined earnings by companies in the index have exceeded the previous peak reached in 2007, the measure itself is 19 percent below that October 2007 record.
Companies have “increased efficiency, productivity and profit margins,” said David Goerz, the chief investment officer at Highmark Capital Management Inc., in a telephone interview yesterday. “That’s resulted in strong performances at a time when investors are very skeptical about the future. It’s not surprising that the market would be trading at a significant discount.” He said, “There’s a lot of upside for the U.S. equity market.”
Russell indexes started updating following an hour-and-a- half outage after Nasdaq OMX Group Inc. resolved a problem. Measures such as the Russell 2000 Index (RTY) and Russell 1000 Index resumed updating at 11:04 a.m. New York time, according to data compiled by Bloomberg and a notice on Nasdaq OMX’s website.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
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