daytrade diaries nov. 14/15 wk., page-2

http://www.bloomberg.com/apps/news?pid=20601087&sid=adS56L2fjyKY


U.S. Stocks Gain to Extend Second Straight Weekly Advance
Share Business Exchange

By Mary Childs

Nov. 13 (Bloomberg) -- U.S. stocks rose, extending a second straight weekly advance, as higher-than-estimated earnings at Walt Disney Co. and Abercrombie & Fitch Co. overshadowed an unexpected drop in consumer confidence. The dollar declined against most major counterparts.

Disney, the world’s largest media company, added 4.8 percent as higher fees for its ESPN channels helped lift profit by 18 percent. Abercrombie & Fitch rallied 11 percent as earnings excluding some items beat the average analyst estimate by 48 percent. J.C. Penney Co. jumped after raising its annual profit forecast, while Goodyear Tire & Rubber Co. advanced on Goldman Sachs Group Inc.’s recommendation to buy the shares.

The Standard & Poor’s 500 Index rose 0.6 percent to 1,093.48 at 4:04 p.m. in New York. The Dow Jones Industrial Average gained 73 points, or 0.7 percent, to 10,270.47. Stocks in Europe advanced as the euro region’s economy emerged from recession in the third quarter.

“The market has a little Teflon here,” said Mike Ryan, the New York-based head of wealth management research for the Americas at UBS Financial Services Inc., which oversees $655 billion. “That suggests that folks are looking past the current data releases.”

Benchmark equity indexes briefly erased gains in morning trading after confidence among U.S. consumers slid for the second consecutive month amid surging unemployment. The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 66 from 70.6 in October. The index was projected to rise, according to the median forecast in a Bloomberg News survey of economists.

Rally Continues

The S&P 500 gained 2.3 percent this week and on Nov. 11 closed at its highest level since October 2008. The index has rallied 62 percent from a 12-year low in March, recovering almost half of its plunge from a record in October 2007, amid optimism that government stimulus programs and record-low interest rates are helping to drag the economy out of recession.

Walt Disney added 4.8 percent to $30.44. Net income increased to $895 million from $760 million a year earlier. Excluding one-time items, profit of 46 cents a share beat the 41-cent average estimate of 21 analysts. Sales gained 4.5 percent to $9.87 billion in the period ended Oct. 3, topping the $9.3 billion average estimate of 18 analysts.

Abercrombie & Fitch climbed 11 percent to $40.68 as the teen-clothing retailer reported a third-quarter adjusted profit of 30 cents per share, while analysts in a Bloomberg survey estimated 20 cents.

Record Earnings Beat

Eighty percent of S&P 500 companies that have released results exceeded the average analyst estimate for third-quarter earnings per share, marking the highest proportion for a full quarter in Bloomberg data going back to 1993, even as profits slumped for a record ninth straight quarter.

J.C. Penney added 6.2 percent to $31.21. The third-largest U.S. department store chain raised its annual profit forecast to as much as $1.08 a share from a previous prediction of 90 cents a share maximum it previously predicted, citing better-than- expected results for the year so far.

Consumer discretionary shares posted the steepest advance among 10 industries in the S&P 500, adding 1.6 percent as a group.

McDonald’s Corp. rose following a report it plans to expand in Poland. The newspaper Puls Biznesu cited Grzegorz Chmielarski, a business development director in Poland. The shares gained 2.3 percent to $63.58.

Goodyear added 4.4 percent to $14.34 after Goldman Sachs raised the shares to “buy” on prospects for improved earnings amid a “more favorable supply/demand balance in 2010.”

Juniper Networks Inc. rose 5.9 percent to $26.15. The second-largest maker of networking equipment was raised to “outperform” from “market perform” at Oppenheimer & Co.

To contact the reporter on this story: Mary Childs in New York at [email protected].

Last Updated: November 13, 2009 16:12 EST