U.S. Stocks Rise as EU Ministers Seek Funding

By Rita Nazareth - Dec 19, 2011 9:39 PM GMT+0700

U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third straight day, as European finance ministers seek to draw additional aid and form new budget rules to contain the region’s debt crisis.

Caterpillar Inc. (CAT) and Pfizer Inc. (PFE) increased at least 1 percent to pace gains among the biggest companies. Las Vegas Sands Corp. rallied 2.2 percent as its unit Sands China Ltd. said a Hong Kong regulator probe ended. Vertex Pharmaceuticals (VRTX) Inc. jumped 1.5 percent after RBC Capital Markets raised its recommendation for the drugmaker’s shares.

The S&P 500 added 0.3 percent to 1,222.74 at 9:37 a.m. New York time. The benchmark gauge for U.S. equities gained 0.7 percent over the previous two days. The Dow Jones Industrial Average rose 36.18 points, or 0.3 percent, to 11,902.57 today.

“A meeting is better than no meeting, but based on past meetings in Europe, there’s no guarantee that anything substantive will come out,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion. “Hopefully we won’t see a situation in which the market, by dramatically increasing the cost of funding, forces European leaders to get more serious.”

Stocks fell last week (SPX) as European leaders struggled to solve the region’s debt crisis and the Federal Reserve refrained from additional stimulus. Equities rose the last two days of the week as data on jobless claims and manufacturing offset concern Europe’s crisis is escalating. The S&P 500 has fallen 3 percent this year through Dec. 16.

Additional Funding

Euro-area finance ministers will hold a conference call to discuss 200 billion euros ($261 billion) in additional funding through the International Monetary Fund and the mechanics of a so-called fiscal compact that was negotiated at a Dec. 9 European Union summit, according to two people familiar with the planning.

“There’s discussions about putting some more money into the IMF,” said Andy Lynch, a portfolio manager at Schroder Investment Management Ltd., which oversees about $284 billion. “If that takes out some of the sovereigns that are currently paying very high yields out of the market for a couple of years, giving them time to restructure their finances, that can only be good news.”

Some of the biggest companies gained today. Caterpillar increased 1.4 percent to $88.45. Pfizer rose 1 percent to $21.24.

Las Vegas Sands (LVS) rallied 2.2 percent to $42.45. Sands China said an investigation by the Hong Kong Securities and Futures Commission for alleged breaches of regulations has ended, according to a company statement to the stock exchange. The SFC started a probe of the China unit of Las Vegas Sands in March.

Vertex Pharmaceuticals rose 1.5 percent to $34.41. The drugmaker was raised to “top pick” from “sector perform” at RBC Capital Markets. The 12-month price estimate is $48 a share.

To contact the reporter on this story: Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net