Stocks Gain as S&P 500 Completes Best Week Since March

June 11 (Bloomberg) — James Paulsen, who helps oversee about $375 billion as chief investment strategist at Wells Capital Management, talks with Bloomberg’s Lori Rothman about his investment strategy. Paulsen also discusses investor sentiment and the outlook for the U.S. economy and stock market. (Source: Bloomberg)
June 11 (Bloomberg) — Bloomberg’s Deborah Kostroun reports on the performance of the U.S. equity market today. U.S. stocks advanced after National Semiconductor Corp. spurred a rally in technology shares that helped the market overcome the largest drop in American retail sales since September. (Source: Bloomberg)
U.S. stocks rose, pushing the Standard & Poor’s 500 Index to the biggest weekly advance since March, as China’s exports jumped the most in six years, Federal Reserve Chairman Ben S. Bernanke said the economic recovery is intact and commodity prices gained.
Alcoa Inc., DuPont Co. and Dow Chemical Co. helped lead raw-material producers 5.3 percent higher as reports showed the global economy is strengthening. A measure of apartment developers, hotel operators and warehouse owners rallied after Fitch Ratings Ltd. boosted its outlook on the industry. Bristol- Myers Squibb Co.soared 12 percent, the biggest gain in 15 months, after studies showed two of its cancer drugs worked better than current therapies.
The S&P 500 climbed 2.5 percent this week to 1,091.60 as all 10 of its main industries rose. The Dow Jones Industrial Average had its first gain in four weeks, rising 279.10 points, or 2.8 percent, to 10,211.07.
“The bear is running out of fuel,” said Don Hays, who manages more than $1 billion at Hays Advisory Group in Nashville. “We’re virtually on the threshold of what you only get at the bottom of major bear markets. It’s one of those amazing times to buy stocks.”
The advance this week pared the S&P 500’s decline since April 23 to 10 percent. The index has fallen 2.1 percent this year after concern that European budget deficits would lead to a default forced the region’s regulators to intervene with a 750 billion-euro ($908 billion) rescue package. Reports this week showed property pricesin China rose at a near-record pace and exports surged 48.5 percent in May, signaling Europe’s crisis hasn’t slowed the world’s fastest-growing major economy.
Volatility Decreases
The Chicago Board Options Exchange Volatility Index, or VIX, fell 19 percent to 28.79, the lowest since April 30. The retreat indicates investors are paying less for insurance against declines in the S&P 500.
Materials stocks rose the most among the 10 main S&P 500 industries, posting the biggest gain in three months. DuPont, the third-largest U.S. chemical maker, climbed 9.3 percent to $37.61, the highest since May 17. Alcoa, the biggest U.S. aluminum producer, increased 4.8 percent to $11.36.
Confidence among U.S. consumers jumped in June, sending the Thomson Reuters/University of Michigan preliminary index of consumer sentiment to 75.5, the highest level since January 2008.
Earnings, Cash
“We still have strong growth,” said Hank Smith, who helps oversee $6 billion as chief investment officer of Haverford Trust Co. in Radnor, Pennsylvania. “The market can’t ignore the fact that we’ve got profit growth, we’ve got exceptional balance sheets flush with record amounts of cash.”
U.S. real-estate investment trusts gained 7.7 percent after Fitch Ratings boosted its outlook on the group to “stable” from “negative.” Fitch cited improved capital market access and liquidity trends.
AvalonBay Communities Inc. rose 12 percent to $103.23, the highest since May 12. The second-largest publicly traded apartment landlord boosted its second-quarter forecast. The company expects funds from operations in a range of $1.01 to $1.03 a share, compared with a previous forecast of 93 cents to 97 cents.
Bristol-Myers surged 12 percent to $25.08. The leukemia pill Sprycel worked better and faster at eliminating malignant cells than the standard blood-cancer treatment, a study found. The drug ipilimumab kept about a quarter of melanoma patients alive for two years — about twice the proportion with current therapies, a separate trial showed.
Factory Goods
Factories kept churning out more goods last month, while prices and home construction fell, pointing to a manufacturing- led U.S. recovery that is not generating inflation, economists said before reports next week.
Best Buy Co., FedEx Corp. and Carnival Corp. are among the five companies in the S&P 500 scheduled to report results next week. Profits for companies in the index are forecast to rise 34 percent in the second quarter and 25 percent in the third, according to data compiled by Bloomberg.
Goldman Sachs Group Inc., the most profitable bank in Wall Street history, fell 4.7 percent this week to $135.64. The company was subpoenaed by a U.S. panel investigating the financial crisis after it allegedly failed to hand over documents in a timely manner. Regulators also said on June 10 that they are probing the firm’s $2 billion Hudson Mezzanine collateralized debt obligation.
Anadarko Petroleum Corp., the Texas oil company that owns a 25 percent stake in BP Plc’s leaking oil well in the Gulf of Mexico, fell 7.2 percent to $41.79 as the Obama administration and lawmakers stepped up pressure to end a record U.S. oil spill.
To contact the reporters on this story: Kelly Bit in New York at kbit@bloomberg.netLynn Thomassonin New York at lthomasson@bloomberg.net.

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