April 23 (Bloomberg) -- U.S. stocks rose, recouping yesterday’s drop, as better-than-estimated earnings at companies from Marriott International Inc. to ConocoPhillips and EBay Inc. overshadowed falling home sales and higher jobless claims.
Marriott, the biggest U.S. hotel chain, surged 12 percent and helped drive Host Hotels & Resorts Inc., the largest lodging real-estate investment trust, to a 17 percent advance. EBay rallied 12 percent, while Apple Inc. and ConocoPhillips climbed more than 3 percent, after earnings topped analyst projections. NYSE Euronext jumped 14 percent on takeover speculation.
“Even companies that are just meeting expectations are holding up pretty well because many investors were really expecting the very worst,” said Jeffrey Coons, co-director of research at Manning & Napier Advisors Inc., which manages $16 billion in Fairport, New York. “We’re still going to have tough economic and earnings reports. But the amount of pessimism that was embedded in prices gives you a lot of room.”
The Standard & Poor’s 500 Index increased 1 percent to 851.92. The Dow Jones Industrial Average added 70.49 points, or 0.9 percent, to 7,957.06. About 10 stocks gained for every nine that fell on the New York Stock Exchange.
Benchmark indexes fluctuated for most of the day before turning decisively higher in the final half hour of trading. The S&P 500 is up 26 percent from a 12-year low on March 9 as government efforts to fix the financial system and revive economic growth fuel speculation the global recession is subsiding. The Federal Reserve and U.S. government have pledged $12.8 trillion to boost the economy and consumer spending.
Hotel Rally
Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression.
Marriott International Inc. rose $2.41 to $22, its steepest gain of the year. The hotel chain posted a profit from operations excluding charges of 23 cents a share, beating the 13 cents projected by analysts in a Bloomberg survey, as cost cuts helped results.
Other hotel-related stocks also advanced. Host Hotels & Resorts Inc. climbed $1.02 to $7.10. Starwood Hotels & Resorts Worldwide Inc. jumped 11 percent to $19.94.
EBay climbed $1.84 to $16.62. The most-visited U.S. e- commerce site’s better-than-estimated sales and profit signaled that efforts to overhaul its auction and fixed-price retail site are working.
Apple added $3.89 to $125.40 after a doubling in sales of its iPhone and new versions of the iPod helped it sidestep a slump in consumer spending.
ConocoPhillips
ConocoPhillips surged $1.87 to $39.93 as the third-biggest U.S. oil producer said first-quarter profit fell less than analysts estimated after output topped the company’s forecast.
NYSE Euronext, which operates the world’s largest stock exchange, surged $2.81, or 14 percent, to $23.37 after Manager- Magazin reported that Deutsche Boerse AG restarted merger talks, citing unidentified people in the financial industry. Still, four people familiar with the situation told Bloomberg News that the second round of talks since January probably won’t result in a takeover.
Pactiv Corp. climbed the most in the S&P 500, advancing 21 percent to $20.82. The maker of Hefty garbage bags increased its forecast, predicting earnings excluding some items of at least $1.97 a share this year.
RadioShack Corp. gained 15 percent to $12.39. The electronics chain reported first-quarter earnings per share of 34 cents, beating the average analyst estimate by 59 percent.
Financials Gain
The S&P 500 Financials Index of 80 banks, insurers and investment firms rose 4.5 percent for the biggest gain among 10 industry groups in the index. The gauge is up 76 percent from a 17-year low reached March 6.
Fifth Third Bancorp gained 3.5 percent to $3.82. The Ohio bank reported a loss per share excluding items that was narrower than the consensus estimate of 28 cents.
PNC Financial Services Group Inc. added 7.5 percent to $40.93. The fifth-largest U.S. bank by deposits said first- quarter profit rose 38 percent on higher mortgage income as customers refinanced their homes.
American Express Co., the largest credit-card company by purchases, surged 7.9 percent for the biggest gain in the Dow average. Bank of America Corp. rose 6.8 percent to $8.82. Wells Fargo & Co. jumped 11 percent to $20.09. Capital One Financial Corp. rallied 18 percent to $16.93.
GM, Home Depot
General Motors Corp. slumped 4.1 percent to $1.62 for the biggest decline in the Dow average. The automaker said the lack of a resolution in Delphi Corp.’s bankruptcy could force GM into an uncontrolled shutdown. General Motors said it will idle 13 assembly plants for multiple weeks to reduce inventory.
Home Depot Inc., the largest home-improvement retailer, lost 41 cents, or 1.6 percent, to $25.76. Purchases of existing homes decreased 3 percent to an annual rate of 4.57 million, lower than forecast, from 4.71 million in February, the National Association of Realtors said. The median price slumped 12 percent from a year ago and distressed properties accounted for about 50 percent of sales
United Parcel Service lost 2.6 percent to $53.33. The world’s largest package-delivery company posted a profit that trailed estimates and forecast second-quarter earnings short of analysts’ projections as the recession ravages shipping demand.
‘Under Pressure’
U.S. economic weakness will mean that profit margins will “remain under pressure” throughout 2009, UPS Chief Financial Officer Kurt Kuehn said on a conference call with analysts and investors.
A gauge of 28 raw-materials producers fell 0.3 percent for the second-biggest decline in the S&P 500 among 10 industry groups as copper prices slumped and Nucor Corp. reported its first quarterly loss in at least 19 years.
Nucor, the second-largest U.S.-based steel producer, fell 9.2 percent to $40. U.S. Steel Corp. and AK Steel Holding Corp. lost at least 4.6 percent.
Copper fell 3.4 percent, capping the biggest four-day drop this year, as a jump in claims for jobless benefits triggered concern that a weak labor market will prolong the recession and a slump in metal demand. The metal is down 9.4 percent this week, the sharpest four-day slide since Dec. 5.
The number of Americans filing first-time applications for unemployment insurance rose last week to 640,000 as forecast. Total benefit rolls climbed to 6.14 million, reaching a record for a 12th straight week and indicating the labor market continues to deteriorate.
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