U.S. Stocks Gain on Greece Speculation; Freeport, Exxon Rise
By Rita Nazareth
Feb. 9 (Bloomberg) -- U.S. stocks rallied, recouping yesterday’s losses, as commodities gained and speculation grew that Greece will get European help with its budget deficit.
Freeport-McMoRan Copper & Gold Inc. and Exxon Mobil Corp. rose at least 1.2 percent as metals advanced in London and crude oil rebounded above $72 a barrel. Coca-Cola Co. advanced 1.8 percent after revenue topped estimates as sales grew in China and India. Electronic Arts Inc. plunged 7.5 percent after the world’s second-largest video-game maker forecast earnings that trailed some analysts’ estimates.
The Standard & Poor’s 500 Index climbed 1.3 percent to 1,070.28 at 9:36 a.m. in New York. The Dow Jones Industrial Average increased 130.45 points, or 1.3 percent, to 10,038.84 after closing below 10,000 for the first time since November yesterday.
“The market is poised to go higher,” said Tom Wirth, senior investment officer at Chemung Canal Trust Co., which manages $1.6 billion in Elmira, New York. “Corporate earnings and economic data points have been strong in our country. What recently led the market lower was the international scenario. As soon as we get relief on that front, we’ll see recovery. The path of at least resistance is going to be higher over the next few months.”
U.S. stocks retreated yesterday amid concern that deteriorating European government finances will derail the economic recovery. The S&P 500 has fallen for four straight weeks, the longest losing streak since July, and is down about 7 percent from a 15-month high on Jan. 19.
EU Discussions
European Union leaders will discuss Greece’s plans to reduce the region’s biggest deficit when they meet Feb. 11, and European Central Bank President Jean-Claude Trichet’s decision to leave a meeting of policy makers in Sydney one day early fanned speculation that officials will agree on aid.
“We are not convinced that January’s poor performance has set the tone for this year and prefer to take our cues from the economic and fundamental backdrops, which have been steadily improving,” wrote Brian Belski, New York-based chief strategist at Oppenheimer & Co., in a report distributed yesterday after markets closed.
More than 300 companies in the S&P 500 have reported fourth-quarter earnings since Jan. 11, and about 77 percent have beaten analysts’ estimates, according to data compiled by Bloomberg.
The economy in the U.S. expanded in the fourth quarter at the fastest pace in six years, the Commerce Department said Jan. 29.
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net.
Last Updated: February 9, 2010 09:38 EST
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