April 16 (Bloomberg) -- U.S. stocks advanced for a second day as Hewlett-Packard Co. led a rally in technology shares and banks climbed on better-than-estimated earnings at JPMorgan Chase & Co.
Hewlett-Packard rose to a two-month high after it took the top spot in the nation’s personal-computer market and industry shipments decreased at a slower rate in the U.S. than the rest of the world. Semiconductor companies jumped after Nokia Oyj, the world’s biggest maker of mobile phones, said demand was stabilizing. JPMorgan, the largest U.S. bank by market value, climbed 3.5 after posting record fixed-income trading revenue and saying it’s ready to repay government bailout funds.
The Standard & Poor’s 500 Index rose 1.6 percent to 865.38 at 3:48 p.m. in New York, with technology shares in the index extending their 2009 advance to almost 14 percent, the best start to a year since 1998. The Dow Jones Industrial Average increased 102.66 points, or 1.3 percent, to 8,132.28. About four stocks rose for each that fell on the New York Stock Exchange.
“People are becoming a little more optimistic and willing to accept more risk,” said William Dwyer, senior investment officer at Baltimore-based MTB Investment Advisors Inc., which oversees $24 billion.
Stocks opened higher after the government said fewer Americans filed claims for jobless benefits last week even as insured unemployment rose to the highest level in 26 years. Initial claims decreased by 53,000 to 610,000 in the week ended April 11. Benchmark indexes then fluctuated as the bankruptcy of General Growth Properties Inc., the largest real-estate Chapter 11 filing in U.S. history, weighed on property companies.
Tech Rally
Hewlett-Packard rose 5.5 percent to $36.76, the best gain in the Dow, and led technology companies in the S&P 500 to a 3.5 percent gain. Already the biggest personal-computer maker worldwide, Hewlett-Packard took the top spot in the U.S. market from Dell Inc. last quarter for the first time since 2001, according to research firm Gartner Inc.
U.S. PC shipments dropped at a smaller rate than the rest of the world, falling 3.1 percent to 15 million last quarter, Framingham, Massachusetts-based IDC said. Stamford, Connecticut- based Gartner said U.S. shipments were little changed.
Texas Instruments Inc., whose semiconductors are used in mobile phones, rose 4.8 percent to $17.83. Nokia of Finland said it will meet its profit margin forecasts this year. Nokia cut its industry sales forecast in January for the third time in about three months.
Micron Upgrade
Micron Technology Inc. jumped 11 percent to $4.99. The biggest U.S. producer of computer-memory chips was raised to “overweight” from “equal weight” at Barclays Plc, which cited improved cost controls.
Financial shares tracked the performance of JPMorgan Chase, which rose as much as 4.5 percent and slipped as much as 0.6 percent before recovering. Shares of the second-biggest U.S. bank by assets recently were up 3 percent at $33.54, more than double their price on March 9.
JPMorgan earnings fell 10 percent to $2.14 billion, or 40 cents a share, topping the average analyst estimate of 32 cents. Chief Executive Officer Jamie Dimon, calling money received through the Troubled Asset Relief Program “a scarlet letter,” said on a conference call that the bank is awaiting guidance from the U.S. Treasury Department.
“We could pay it back tomorrow,” he said.
Citigroup climbed 2.3 percent to $4.06.
Regional Bank Rally
Regions Financial Corp., Alabama’s biggest bank, gained 38 percent to $6.88 after Chief Executive Officer Dowd Ritter said in a regulatory filing that the company would report a profit for the first quarter. Regions was expected to report a loss of 41 cents a share, according to the average estimate in a Bloomberg survey.
Fifth Third Bancorp, the largest bank based in Ohio, jumped 7.7 percent to $4.35. Huntington Bancshares Inc., the third- biggest in that state, advanced 8.2 percent.
“For financials, the tide is coming in again,” said Robert Lutts, who manages $400 million as president of Cabot Money Management in Boston. “A lot of active managers like us that have been out of the sector are gradually returning.”
General Electric Co. climbed 4.1 percent to $12.31. The world’s biggest provider of power-generation equipment and services has “very good” orders in that area and is helping customers obtain more financing through government entities, said GE Vice Chairman John Krenicki.
VIX Retreats
The benchmark index for U.S. stock options slid to the lowest in more than six months. The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell 1.5 percent to 35.64. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November yet still almost double the 20 average over its 19-year history.
Lincoln National Corp. lost 4.3 percent to $9.65. The insurer seeking a $3 billion U.S. bailout had its debt and financial-strength ratings cut by Moody’s Investors Service, which said it may downgrade the company again without the federal assistance.
The S&P 500 has rebounded more than 28 percent from a 12- year low on March 9 as lenders from Citigroup to Barclays Plc said they made money in the first two months of 2009 and Treasury Secretary Timothy Geithner announced plans to finance as much as $1 trillion in purchases of financial firms’ distressed assets.
Earnings Season
Still, 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.
Harley-Davidson Inc. gained 6 percent to $18.16. The biggest U.S. motorcycle maker posted first-quarter earnings excluding some items of 68 cents a share, beating the average analyst estimate by 30 percent.
NYSE Euronext Chief Executive Officer Duncan Niederauer said last month’s rally in equities was propelled by traders taking advantage of price fluctuations rather than “real money” investors, who are waiting to see whether the gains will hold, the Financial Times reported.
“We’re waiting for another rally, in my opinion, in around June and July,” when institutional and other long-term investors start putting more money into equities, the newspaper quoted him as saying in an interview.
