(Bloomberg) -- U.S. stocks rose, with benchmark indexes extending all-time highs, as Apple Inc. rallied and the International Monetary Fund indicated it would raise its outlook for the economy.
Apple jumped 3.2% after the company struck a deal to sell its iPhones through China Mobile Ltd., the world’s largest phone company. T-Mobile US Inc. rose 1.8% after people familiar with the situation said SoftBank Corp. Chief Executive Officer Masayoshi Son is exploring a deal for Sprint Corp. to buy the majority of the wireless-phone provider next year. Micron Technology Inc. slid 3.8% after Bank of America Corp. downgraded its rating on the stock.
The Standard & Poor’s 500 Index added 0.4% to 1,825.73 at 9:58 a.m. in New York. The Dow Jones Industrial Average advanced 59.02 points, or 0.4%, to 16,280.16. Trading in S&P 500 stocks was 13% below the 30-day average at this time of day. U.S. exchanges will close early tomorrow before the Christmas holiday.
“The positive assessment the IMF gave with regard to U.S. growth corroborates the improving economic indicators we have been witnessing the last two months in the U.S.,” said Konstantin Giantiroglou, head of investment advisory at Neue Aargauer Bank in Brugg, Switzerland. “The sentiment going into Christmas and New Year is good. We have an improving global economy and for the first time since the financial crisis we should see a synchronous recovery.”
The Dow jumped 3% last week and the S&P 500 climbed 2.4% as the Federal Reserve said it will reduce the pace of bond buying amid faster-than-estimated economic growth. The S&P 500 has advanced 27% in 2013, putting it on course for its biggest annual rally since 1997. Three rounds of monetary stimulus have sent the equities benchmark up more than 168% from a 12-year low in 2009.
The IMF is raising its outlook for the U.S. economy, as a budget deal in Washington and the Fed’s plan to taper its bond buying ease doubts about the future, IMF Managing Director Christine Lagarde said yesterday in an interview broadcast today on NBC’s “Meet the Press.” The IMF predicted in October that the world’s largest economy would expand 2.6% next year. Lagarde didn’t set out any new projections.
A report last week indicated the U.S. economy expanded at a 4.1% annualized rate in the third quarter, as consumers stepped up spending on services and companies invested more in software. The reading was the strongest since the final three months of 2011 and up from a previous estimate of 3.6%, according to the report.
Data today showed that consumer spending rose in November by the most in five months as Americans took advantage of store discounts during the year-end shopping season, giving the world’s largest economy a lift.
A separate report showed the the Thomson Reuters/University of Michigan final index of consumer sentiment in December climbed to 82.5 from 75.1 a month earlier. The median forecast of 61 economists in a Bloomberg survey called for 83 after a preliminary reading of 82.5.
The S&P 500 has gained 1.1% so far this month. December has been the second-best month for U.S. equity returns, according to data compiled by Bloomberg that starts in 1928. The average gain for the month is 1.5%, more than twice the overall monthly mean of 0.6%. The last December retreat for the S&P 500 was in 2007.
“We are seeing the typical end-of-year window dressing,” Christoph Hock, an equity sales trader at Alpha Wertpapierhandels GmbH in Frankfurt, said by phone. “Everyone was expecting a Santa Claus rally. And we’ve had it. I think there is also a relief rally following the Fed’s decision. I wouldn’t be surprised to see further trading on the upside.”
Nine of 10 main S&P 500 groups advanced today, with phone and technology stocks rallying at least 0.9% to pace the gains.
Apple rose 3.2% to $566.47. The company, ending six years of negotiations, struck a deal that will give both the U.S. phone maker and China Mobile a means to fight declining share in the market of 1.2 billion wireless subscribers.
China Mobile will sell the iPhone 5s and 5c models in its stores from Jan. 17, the companies said in a statement that provided no financial terms. Apple’s stores in the country will also offer the phones for China Mobile’s network.
T-Mobile advanced 1.8% to $31.56. SoftBank’s Son has discussed financing a bid with banks such as Credit Suisse Group AG, Mizuho Bank Ltd. and Goldman Sachs Group Inc., people familiar with the matter said.
Son, who is looking for about $20 billion to finance a bid, has also met with Deutsche Bank AG and JPMorgan Chase & Co., while receiving advice from the Raine Group LLC, said the people, who asked not to be identified because the discussions are private. Those six banks helped finance and advise on SoftBank’s purchase of Sprint.
Darden Restaurants Inc. rallied 3.8% to $53.02. The owner of Olive Garden and LongHorn Steakhouse slid 3.5% last week after announcing it will separate the Red Lobster seafood chain.
The plan falls short of activist investor Barington Capital Group LP’s proposals for a bigger shakeup, including ways to profit from its real estate. Starboard Value LP, which disclosed a stake in the company today, also said Darden’s proposal is inadequate.
Jos. A. Bank Clothiers Inc. slid 1.5% to $56.20. The retailer rejected a $1.54 billion takeover offer from Men’s Wearhouse Inc. as too low and said it would continue to seek its own acquisitions. Men’s Wearhouse dropped 1% to $51.52.
Micron Technology slid 3.8% to $21.33. An analyst at Bank of America Corp. downgraded the memory chipmaker to underperform from neutral, citing increasing competition.