10-Feb-2012 - US Stocks Advance as Greek Leaders Agree on Austerity Measures

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U.S. Stocks Advance as Greek Leaders Agree on Austerity Measures February 09, 2012, 4:23 PM EST By Rita Nazareth Feb. 9 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third day, as Greek political leaders struck a deal on a package of austerity measures needed to secure international rescue funds. The S&P 500 increased 0.2 percent to 1,352.02 as of 4 p.m. New York time, according to preliminary closing data. The benchmark gauge declined as much as 0.4 percent earlier today. “I’d expect a better performance for stocks,” Peter Jankovskis, who helps manage about 2.6 billion at Oakbrook Investments in Lisle, Illinois, said in a telephone interview. “The market is acting skittish. Maybe people want to see the final document. If the EU can show that they can deal with a small country with a big problem, then investors may be reassured that some of the larger countries with smaller problems can also be handled.” Equities rallied Reebok NFL jerseys around the world after Greece’s government reached a deal on austerity measures required for a 130 billion- euro (173 billion) financing package. Greece faces a 14.5 billion-euro bond payment on March 20 and is struggling to secure financing to avert a collapse of the economy that could spark a new round of contagion in the euro area. Today’s gain put the S&P 500 about 1 percent away from its peak nine months ago of 1,363.61, which was the highest level since June 2008. The benchmark gauge for U.S. equities climbed 7.5 percent this year, as companies reported earnings that beat analysts’ estimates for the 12th straight quarter while better- than-expected data on manufacturing and employment bolstered optimism about the world’s largest economy. Momentum and Breadth A rally in stocks has pushed market momentum and breadth to levels that suggest any imminent retreat in the S&P 500 will be limited to 3 percent, according to JPMorgan Chase & Co. Michael Krauss, head of technical research at JPMorgan in New York, this week boosted the higher end of his 2012 forecast for the S&P 500 to 1,440, from a November projection of 1,350, after the market had its best start of wholesale nfl jerseys a year since 1991. While prices may have risen too fast, any pullback will attract investors who missed the rally, limiting the decline, he said. “There is no setup right now that to me would suggest a 5- to-10 percent correction is imminent,” Krauss said in a note today. “There is nothing worse than underperforming a rising market. Hence, we see 2-to-3 percent corrective ‘non-crisis’ pullbacks will find buyers.” Bull Market As global stocks return to a bull market, the losers in the U.S. are companies least tied to economic growth. For the first time since 1999, S&P 500 utilities, phone companies and providers of consumer staples posted the only monthly losses, slumping at least 1.5 percent with dividends in January, and continued to lag behind this month. It’s a reversal from 2011, when the three defensive industries returned more than 6.3 percent as investors embraced stocks thought to do well during a slowdown. Investors are shifting toward riskier assets as U.S. manufacturing expanded the most since June and the jobless rate fell to a three-year low of 8.3 percent. In 2011, the global equity measure suffered its biggest losses since the subprime- mortgage crisis. “Last year, investors tended to hide in things which are stable, paying reasonable nba jerseys from china dividends,” said Sudhir Nanda, a money manager and head of the quantitative equity group at T. Rowe Price Group Inc. in Baltimore, which oversees 489.5 billion. “This year, people looked at the U.S. and said, ‘Things are not really that bad.’ If the economy is humming, people tend to buy more of the sectors which will profit from growth, industrials, materials and things like that.” --Editors: Jeff Sutherland, Nick Baker To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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