u.s. stocks rise the most in a month

U.S. Stocks Rise the Most in a Month on Economy; Intel Gains

Dec. 1 (Bloomberg) -- U.S. stocks climbed the most in a month, snapping a three-day slump as reports showed the economy is growing enough to lift earnings without generating inflation.

Companies whose profits are tied to economic growth led the gains, including Intel Corp., the world's biggest computer-chip maker, and Phelps Dodge Corp., the No. 2 copper producer.

Consumer spending and income increased in October, while a measure of inflation watched by the Federal Reserve was little changed. Financial shares joined the rally as concern eased the central bank will keep raising interest rates next year.

``Stocks are trading on numbers that show inflation isn't out of control,'' said Larry Peruzzi, senior equity trader at Boston Co. ``Everyone's hoping that the Fed will get to the end of its rate hikes.''

The Dow Jones Industrial Average added 103.02, or 1 percent, to 10,908.89 as of 2:42 p.m. in New York. The Standard & Poor's 500 Index rose 14.18, or 1.1 percent, to 1263.66. The two last rose that much on Oct. 28. The Nasdaq Composite Index was up 30.44, or 1.4 percent, at 2263.26.

The market also found support from oil prices, which erased early gains. Crude oil for January delivery added 33 cents to $57.65 a barrel. Earlier the contract reached $58.

The S&P 500 climbed 3.5 percent last month and history shows it may keep rising through the end of the year. The index has advanced in 17 of the last 20 Decembers.

Spending, Inflation

Personal spending rose 0.2 percent and income increased 0.4 percent in October, the Commerce Department said. The report's price gauge tied to spending patterns and excluding food and energy costs, policy makers' preferred measure for tracking inflation, rose 0.1 percent. Economists in a Bloomberg News survey estimated a 0.2 percent gain.

The Institute for Supply Management's manufacturing index came in at 58.1 last month, down from 59.1 in October though still signaling growth. An index of factory costs decreased.

Treasuries fell as some investors dismissed the reports ahead of a reading on job creation tomorrow. The yield on the benchmark 10-year note rose 6 basis points, or 0.06 percentage point, to 4.54 percent, according to bond broker Cantor Fitzgerald LP. Yields move inversely to prices. The Dollar Index, a measure of the U.S. currency versus six others, rose 0.5 percent.

The U.S. economy may have added 210,000 jobs last month, three times the number of jobs created in October, estimates economists surveyed by Bloomberg News.

``It's a big week with a lot of numbers,'' Boston Co.'s Peruzzi said, ``After Friday, the market should have a good idea as to what the economy will be doing for rest of the year.''

Technology Shares

Computer-related companies were the biggest contributor to the rally among 10 S&P 500 industry groups. Intel climbed 47 cents to $27.15. Teradyne Inc., the world's biggest maker of semiconductor-testing equipment, added $1.07 to $16.70. National Semiconductor Corp., whose chips boost battery life in mobile phones, advanced $1.71 to $27.59.

A measure of raw-material producers rose 1.8 percent, the second biggest industry gain.

Phelps Dodge added $4.91 to $140.58. Newmont Mining Corp., the world's largest producer of gold, gained $1.48 to $47.60. Both stocks were raised to ``buy'' from ``neutral'' at UBS AG.

Copper for delivery in three months rose $131, or 3.1 percent, to $4,377 a metric ton on the London Metal Exchange. Earlier, it rose as high as $4,382, beating yesterday's record by $112 a ton. Contracts for gold rose 1.5 percent to $506.30 an ounce in New York, near their highest since December 1987.

JPMorgan Chase & Co., the third-biggest U.S. bank, added 29 cents to $38.54. American Express Co., the No. 4 U.S. credit- card issuer, rose 55 cents to $52.08. Stable rates may help lift profits for the group.

Trading Higher

More than 21 stocks rose for every four that fell on the New York Stock Exchange. About 1.3 billion shares changed hands on the Big Board, 11 percent more than the same time two weeks ago.

Retailers were mixed as companies reported November sales figures.

Discounter Family Dollar Stores Inc. rose 73 cents to $23.24 after it said same-store sales increased 3.4 percent and will be as much as 4 percent this month. J.C. Penney Co., the third-largest department store chain, had a 3.6 percent increase in same-store sales, more than the 2 percent analysts expected. The stock rose $2.11 to $54.58.

Wal-Mart Stores Inc. slid 71 cents to $47.85. The world's biggest retailer said sales at stores open 21 months or more increased 4.3 percent, while December sales may rise as little as 2 percent. Costco Wholesale Corp., the largest warehouse-club retailer, said U.S. same-store sales were up 6 percent, missing analysts' estimates. The stock fell $1.25 to $48.70.

Nordstrom Inc., an upscale department store, lost 40 cents to $36.48. The company said same-store sales rose 2.8 percent, less than the expected 5.1 percent.

AT&T Inc., the U.S. long-distance telephone carrier bought by SBC Communications Inc. last month, rose 35 cents to $25.26. This is the first day the new company is trading on the New York Stock Exchange under the 117-year-old ticker symbol ``T.''

Marriott International Inc., the largest U.S. hotel company, rose $2.36 to $66.97. Steve Kent and other analysts at Goldman, Sachs & Co. said the company will benefit from strong demand and a program to upgrade its rooms and beds. Kent raised the stock to ``outperform'' from ``in-line.''

Valero Energy Corp., the largest U.S. refiner, rose $4.27 to $100.47. Stockholders approved a two-for-one stock split Dec. 15 to holders of record on Dec. 2.

Shares of U.S. Steel Corp., the nation's biggest steelmaker, and AK Steel Holding Corp. rose on speculation they may be targets for takeover by the loser in the bidding for Canadian steelmaker Dofasco Inc. U.S. Steel jumped $1.72 to $49.32. AK Steel rose 60 cents to $8.89.