(Bloomberg) -- U.S. stocks rose, with the Standard & Poor’s 500 Index extending a record, as data showing lower retail sales and consumer confidence fueled bets the Federal Reserve will maintain stimulus as it starts a policy meeting.
Pfizer Inc., the world’s biggest drugmaker, jumped 1.4 percent after reporting third-quarter profit that beat analysts’ estimates. Masco Corp., which makes faucets and kitchen and bath cabinets, rose 3.6 percent as its sales topped forecasts. Apple Inc., the world’s most valuable company, advanced 0.6 percent after reporting results.
The S&P 500 rose 0.2 percent to 1,765.63 at 10:03 a.m. in New York. The Dow Jones Industrial Average gained 47.71 points, or 0.3 percent, to 15,616.64. Trading in S&P 500 stocks was in line with the 30-day average at this time of day.
“It still seems that the Fed has created this good news is bad news, bad news is good news scenario,” Randy Bateman, who oversees $15 billion as chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said by telephone. “The anticipation is that the Fed will retain its purchasing of $85 billion in monthly Treasury and mortgage securities, which is going to continue to help the housing market. That will be taken fairly well by the market.”
The S&P 500 climbed in 12 of the past 14 sessions through yesterday, as companies beat estimates in the current earnings reporting season and signs of slower economic growth fueled bets the Fed will maintain stimulus measures. The rally has pushed the index up 24 percent this year, leaving it poised for the best annual gain in a decade.
The 16-day government shutdown earlier this month took at least $24 billion out of the economy and will spur the Fed to wait until March to taper, a Bloomberg survey showed this month. The central bank’s policy makers convene today and tomorrow.
Data today showed retail sales dropped 0.1 percent last month, restrained by the biggest decrease at auto dealers since October 2012. Wholesale prices unexpectedly fell in September as food costs retreated. Inflation has been running below the Fed’s 2 percent objective in the near-term, giving policy makers room to maintain monetary stimulus.
The Conference Board’s index of consumer confidence fell to 71.2 in October from 80.2 the month prior, the New York-based private research group said today. The median forecast in a Bloomberg survey of economists called for a reading of 75.
Weaker-than-forecast data yesterday on factory output and sales of previously owned homes added to concern that growth slowed in the weeks before the shutdown. Home prices in 20 U.S. cities rose in August from a year ago by the most since February 2006, the S&P/Case-Shiller index indicated today.
The Fed’s stimulus has helped propel the S&P 500 up more than 160 percent from a 12-year low in 2009. While the rally lifted equity valuations to a four-year high, with the index trading at 15.9 times estimated operating earnings, that’s still below the multiples at the market’s two previous peaks, when the ratio reached 16.5 in October 2007 and 25.7 in March 2000, data compiled by Bloomberg show.
“The market has traveled away, sentiment has got to fairly elevated levels, therefore to push these markets on requires some pretty positive earnings news to come through,” Mark Harris, a London-based fund manager at City Financial, which oversees about $1.2 billion, said in an interview today.
Some 39 members of the S&P 500 release results today, including Pfizer Inc. and Goodyear Tire & Rubber Co. Earnings for the broad equity gauge probably increased 3.7 percent in the third quarter as sales climbed 2.4 percent, according to analysts’ estimates compiled by Bloomberg. Profits have grown by an average of 5.7 percent among the 282 companies that have reported so far, while sales have gained 3.5 percent.
The Chicago Board Options Exchange Volatility Index, the gauge known as VIX that measures options traders’ estimate of future price swings in S&P 500, roe 0.5 percent to 13.38 today. The gauge has lost 19 percent so far this month.
All 10 main S&P 500 groups advanced today, with technology and phone companies rising at least 0.5 percent to pace gains.
Apple added 0.6 percent to $532.78. The maker of the iPhone said revenue in the current quarter will be $55 billion to $58 billion, compared with the $55.5 billion average of analysts’ estimates. Gross margins will be 36.5 percent to 37.5 percent, versus the 38 percent projection.
Masco gained 3.6 percent to $21.67. The company said it had sales of $2.2 billion last quarter, beating the average estimate in a Bloomberg poll of analysts for revenue of $2.1 billion. Adjusted earnings of 27 cents a share also beat projections.
Pfizer rose 1.4 percent to $31.16 for the biggest advance in the Dow. Higher sales of its top vaccine and pain drugs also boosted profit. Pfizer is pushing to expand sales of Prevnar, a pneumococcal vaccine and its second-biggest product, since losing marketing exclusivity for Lipitor, once the world’s top- selling drug.
Michael Kors Holdings Ltd. climbed 0.5 percent to $76.79. The luxury-goods company founded by the designer of the same name will replace NYSE Euronext in the S&P 500 after the close of trading on Nov. 1, S&P said. NYSE Euronext, the biggest U.S. stock exchange owner, is being acquired by Atlanta-based IntercontinentalExchange Inc.
Aetna Inc. slipped 1.8 percent to $60.68. The third-biggest U.S. health insurer said quarterly profit rose 3.9 percent, boosted by the acquisition of rival Coventry Health Care Inc. Insurer shares have slid this month after the top two carriers, UnitedHealth Group Inc. and WellPoint Inc., gave outlooks for next year that disappointed investors.
The industry faces falling payments from the U.S. Medicare program. Technical issues with the Obamacare rollout also have clouded prospects for new business from the federal health-care law.
Goodyear Tire & Rubber Co. plunged 6.4 percent to $20.65. The company reported third-quarter sales that missed analyst estimates and said consumer demand for original equipment in Europe, the Middle East and Asia may fall 5 percent in the rest of 2013.
Seagate Technology Plc lost 1.6 percent to $49.05. The disk drive maker forecast fiscal second-quarter sales below analyst estimates and said it expects demand for its products to remain similar to prior quarters.
American Capital Agency Corp. fell 6.3 percent to $22.37. The real-estate investment trust that buys mortgage debt reported third-quarter spread earnings per share of 58 cents, compared with analysts’ forecast of 81 cents.