u.s. 4-week rally pushes s&p 500 to highest since

U.S. Stocks' 4-Week Rally Pushes S&P 500 to Highest Since 2001 Listen

Nov. 18 (Bloomberg) -- U.S. stocks rallied after General Electric Co. raised its earnings forecast, bolstering confidence about the outlook for corporate profits. The Standard & Poor's 500 Index set a four-year high in wrapping up its fourth straight weekly gain.

GE's estimate for 2006 followed a drop in oil prices to a five-month low and reports earlier in the week that showed the U.S. economy is growing without a pickup in inflation.

``The planets are lining up for the U.S. stock market,'' said Brian Stine, an investment strategist at Allegiant Asset Management in Cleveland, which manages $27 billion. ``Oil prices are falling and the economic figures look good.''

This week, the S&P 500 was up 1.1 percent, notching its best weekly winning streak since July. The Dow Jones Industrial Average added 0.8 percent, for its fourth weekly gain. The Nasdaq Composite Index rallied 1.1 percent and is at its highest level in more than four years.

Today, the S&P 500 increased 5.47, or 0.4 percent, to 1248.27, a level not seen since June 2001. The Dow average rose 46.11, or 0.4 percent, to 10,766.33. The Nasdaq increased 6.61, or 0.3 percent, to 2227.07.

A series of economic reports over the last five days suggested the economy is continuing to grow while inflation is tame. A Federal Reserve report yesterday showed industrial production expanded 0.9 percent in October, the most since May 2004, and the Labor Department said that the number of people filing first-time claims for state unemployment benefits dropped to a seven-month low. A Nov. 16 report showed consumer prices in October rose at the slowest pace in four months.

`Rally to Continue'

``The Fed may indicate it's almost done raising rates next week,'' Stine said. ``That will get the rally to continue.'' The Federal Open Market Committee will release the minutes of its October meeting on Nov. 22. Policy makers have increased interest rates by 25 basis points 12 straight times in the past year and a half.

GE, the world's largest company by market value, advanced $1.09, or 3.1 percent, to $35.75 today, its biggest gain since January 2004. The company increased its 2006 profit forecast after Swiss Reinsurance Co., the world's No. 2 reinsurer, said it agreed to buy GE Insurance Solutions for $6.8 billion.

Per-share profit from continuing operations will be $1.92 to $2.02. That's a 12 percent to 17 percent increase, compared with a previous forecast of 10 percent to 15 percent growth. GE also raised its stock buyback program through 2008 to $25 billion from $15 billion.

Profit growth for S&P 500 companies is expected to slow to 12.2 percent next year, from 15 percent this year, according to Bloomberg analysis of Thomson Financial estimates.

Oil Prices

Crude for December delivery fell 0.4 percent to $56.14 a barrel in New York on speculation that fuel inventories will meet demand, extending its decline for the week to 2.4 percent. Prices have slumped 21 percent from a record $70.85 on Aug. 30.

ConocoPhillips, the No. 3 U.S. oil company, lost 85 cents to $62.23.

General Motors Corp. gained for a second day after hitting a 14-year low, rising $1.42, or 6.3 percent, to $24.05 for the best performance in the Dow average. The world's largest automaker's Chief Executive, Rich Wagoner, said yesterday the company doesn't intend to file for bankruptcy.

Ford Motor Co., the No. 2 U.S. automaker, rose 60 cents to $8.40. Visteon Corp. the second-largest auto-parts maker, gained 53 cents to $7.04. A measure of auto-related shares was the best performer among 24 S&P 500 industry groups, up 4.1 percent.

Today, about 11 stocks rose for every six that fell on the New York Stock Exchange. Almost 1.81 billion shares changed hands on the Big Board, 11 percent more than the three-month daily average.

Merck Gains

Merck & Co. added 81 cents to $30.42. The third-largest U.S. drugmaker said its MK-0518 experimental drug reduced the level of HIV-RNA, a measure of infection with the AIDS virus, 98 percent after a 10-day trial.

Shares of Scientific-Atlanta Inc., the second-largest U.S. maker of set-top boxes for cable-television, gained after Cisco Systems Inc. agreed to purchase the company for $6.9 billion to enter the Internet TV market.

Scientific-Atlanta rose 70 cents to $42.15 and Cisco lost 35 cents to $17.02. Cisco will pay $43 a share, 3.7 percent more than yesterday's closing price. With the purchase, Cisco Chief Executive John Chambers will target consumers' growing use of television, Internet and phone services from a single source as business spending on switches and routers slows. Cisco's equipment runs two-thirds of Internet traffic.

Marvell

Marvell Technology Group Ltd. rallied $6.55 to $57.04. The maker of semiconductors for computer disk drives and network switches said excluding some items, it earned 36 cents a share in the third quarter. Analysts expected profit of 33 cents, the average estimate in a Thomson survey.

Shares of Walt Disney Co. and Gap Inc. fell after disappointing results.

Walt Disney, the second-largest U.S. media company, lost 79 cents, or 3 percent, to $25.20 for the worst performance in the Dow average. The company's fourth-quarter sales missed analyst estimates after movie flops such as ``Dark Water'' and ``The Brothers Grimm.'' Revenue rose 2.5 percent to $7.73 billion, while analysts expected $7.87 billion in a Thomson survey.

Gap, the largest U.S. clothing chain, lost $1.45 to $17.06. The company said net income will be $1.12 to $1.17 a share this year, down from a previous estimate of $1.30 to $1.34 because of discounts.

Autodesk

Autodesk Inc. sank $8.36 to $38.74 today. The maker of software used to design buildings and special movie effects forecast that sales will grow 10 percent to 12 percent in the next fiscal year. That's short of the 14 percent average growth estimate in a Thomson Financial survey.

Google Inc., the owner of the most-used Internet search engine, lost $3.24 to $400.21. Yesterday the stock topped $400 for the first time since it began trading in August 2004 propelled by soaring growth in online advertising and investors' expectations that the company will add new products.

Georgia-Pacific Corp. shares had the top gain in the S&P 500 this week, after the company agreed to be sold to Koch Industries Inc. for $13.2 billion, or $48 a share. The acquisition will make Koch the largest closely held company in the U.S., with business spanning from Dixie paper cups, cardboard boxes and lumber to fuel and chemicals. Georgia- Pacific surged 36 percent to $47.20.

Spiders

S&P 500 shares, called Spiders, advanced 49 cents to $125.13. Nasdaq-100 tracking shares, known by their QQQQ symbol, gained 14 cents to $41.45.

S&P 500 futures expiring in December added 5 to 1250.20 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures lost 1.50 at 1683.

The Russell 2000 Index, a benchmark for companies with a median market value of $563 million, rose 5.08, or 0.8 percent, to 672.22. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, gained 53.58, or 0.4 percent, to 12,468.99. Based on the changes in the Wilshire, the value of stocks increased by $67 billion.