U.S. stocks rose the most in two weeks as better-than-forecast profits from Intel Corp., JPMorgan Chase & Co. and Wells Fargo & Co. eased concern that the slowing economy is dragging down earnings.
Intel gained the most since January after the world's largest chipmaker said a weakening economy hasn't hurt sales. JPMorgan, the third-biggest U.S. bank, advanced after Chief Executive Officer Jamie Dimon said the credit-market crisis is nearing an end. Wells Fargo climbed as the biggest West Coast bank limited losses from slumping California home prices.
The Standard & Poor's 500 Index added 19.97, or 1.5 percent, to 1,354.4 at 1:20 p.m. in New York as all 10 industry groups advanced. The Dow Jones Industrial Average rallied 176.11, or 1.4 percent, to 12,538.58. The Nasdaq Composite Index rose 50.9, or 2.2 percent, to 2,336.94. More than six stocks gained for each that fell on the New York Stock Exchange.
``You're seeing broad participation, which is a good thing,'' said Richard Campagna, portfolio manager at Provident Investment Counsel in Pasadena, California, which manages $3 billion. ``If the market's going to rally you need to broaden out the leadership, which is what you're seeing today.''
The S&P 500 posted its first back-to-back gains in more than a week after falling in four of the previous five trading sessions following disappointing results from Alcoa Inc., General Electric Co. and Wachovia Corp. Stocks gained today even after government reports showed housing starts and building permits fell more than forecast last month, while consumer prices matched economists' projections.
Intel, JPMorgan
Intel climbed $1.30, or 6.2 percent, to $22.21, the most in the Dow average. It led semiconductor companies in the S&P 500 to a 4.8 percent gain, the biggest in four years. Intel's sales rose 9.3 percent to $9.67 billion, topping analyst estimates. Second- quarter revenue will be $9 billion to $9.6 billion, the company said, also beating forecasts. Chief Executive Officer Paul Otellini said yesterday there were no signs of economic weakness hurting sales in the U.S. or Europe.
``Companies and individuals will keep demanding those microprocessors,'' Michael Shinnick, portfolio manager at 1st Source Bank in South Bend, Indiana, which manages $3 billion, said in an interview on Bloomberg Television. ``The demand now is much more global'' than during the last U.S. slowdown in 2001.
KLA-Tencor Corp., the second-biggest U.S. chip-equipment maker, rose $3.54, or 8.9 percent, to $43.41 for the second- -biggest gain in the S&P 500.
JPMorgan Chase rose $2.14 to $44.26. First-quarter profit fell 50 percent to $2.37, or 68 cents a share, after $5.1 billion of writedowns and provisions linked to the collapse of the subprime mortgage market and bad home-equity loans. The results matched the average estimate in a Bloomberg survey of analysts and topped the consensus forecast in a Thomson Financial survey by 4 cents a share.
`Working Itself Out'
Dimon said on a conference call with reporters that the credit-market crisis may be as much as 80 percent over.
The problem ``is working itself out,'' Dimon said. The heads of Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. in the past week also have said the credit-market contraction sparked by falling U.S. housing prices is winding down.
Wells Fargo & Co. rose $1.38 to $29.19. The bank earned $2 billion, or 60 cents a share, compared with 66 cents a share a year earlier. Analysts surveyed by Bloomberg estimated a profit of 57 cents a share on average.
Earnings Watch
The latest batch of earnings reports helped assuage concern that profits will continue to tumble as the economy slips into a recession. Earnings at companies in the S&P 500 are forecast to fall 12.3 percent in the first quarter from the year-earlier period and 3.8 percent in the second quarter, according to analyst estimates compiled by Bloomberg.
Earnings fell 2.5 percent in the third quarter and 23 percent in the fourth quarter of 2007. At the end of last year, analysts forecast increases of 4.7 percent for the first quarter of 2008 and 3.3 percent for the second quarter, according to Bloomberg data.
GE on April 11 lost 13 percent, the most in 20 years, after reporting quarterly profit that fell short of analyst estimates and less revenue than the company had projected. CEO Jeffrey Immelt forecast profit of $2.20 to $2.30 a share for 2008, down from a prediction of $2.42 he had repeated as recently as March 13.
Commodity Producers Rally
Producers of energy and raw materials rallied as oil touched a record $114.95 a barrel on an unexpected decline in U.S. supplies and metal prices advanced.
Exxon Mobil Corp., the largest U.S. oil company, climbed 92 cents to $91.72. Freeport-McMoRan Copper & Gold Inc., the world's second-biggest copper producer, jumped $5.90 to $111.40.
Monsanto Co. rose $6.21 to a record $128.89. Goldman Sachs Group Inc. analysts raised their 2008 and 2009 earnings estimates for the world's biggest seed producer and lifted their share- price target to $140 from $135. Monsanto is ``executing brilliantly'' and likely to benefit from rising corn prices, the Goldman analysts wrote in a report.
Nucor Corp. led steelmakers in the Russell 3000 index to a 4.7 percent gain as all 13 companies in the group advanced. ArcelorMittal, the world's largest steelmaker, plans to boost prices on some steel shipments in the U.S. by $250 a ton, or about 33 percent, to recoup surging costs for energy and iron ore, according to an April 14 company memo to sales personnel. Nucor, the largest U.S.-based steelmaker by market value, rose $3.97 to $72.78. U.S. Steel Corp., the second-biggest, added $5.87 to $152.50.
Huntington, Johnson Controls
Huntington Bancshares Inc. rose 88 cents, or 9.5 percent, to $10.18 for the biggest gain in the S&P 500. The Ohio bank that has lost more than half of its value in the past year plans to sell $500 million of convertible preferred stock to replenish capital.
Johnson Controls Inc. rose $1.50 to 34.13. The largest operator of climate-control systems for commercial buildings said second-quarter profit jumped 27 percent on higher demand for energy-efficiency products.
CSX Corp. rose $2.73 to $60.50. The third-largest U.S. railroad said first-quarter profit increased to 85 cents a share because of higher shipping revenue. The result beat the 74-cent average estimate of analysts surveyed by Bloomberg.
LSI Corp., the maker of computer chips for companies including Seagate Technology, was the only semiconductor company in the S&P 500 to fall, losing 34 cents, or 6.4 percent, to $5.03. Merrill Lynch & Co. analysts downgraded LSI to ``neutral'' from ``buy'' after Seagate yesterday reported revenue and profit in the quarter ended March 28 that fell short of analyst estimates and forecast earnings for the current quarter that may trail the average projection.
BlackRock Inc. fell $2.13 to $203.06. The biggest publicly traded asset manager in the U.S. reported first-quarter earnings that fell short of analysts' estimates because of declines in hedge-fund and real-estate investments.
Talbots Inc. had the biggest decline since its November 1993 initial public offering, falling 29 percent to $9.17. The women's clothing-store chain said HSBC Holdings Plc and Bank of America Corp. are canceling their letters of credit to the company.
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