The Standard &
Poor’s 500 Index reached its highest level since the August selloff,
rising as biotechnology companies rebounded and energy shares extended
their longest rally since December 2013.
The benchmark index
again tested points where an advance petered out at the end of August
and a September rally wilted. The gauge had erased gains earlier
Wednesday after briefly climbing above its average price during the past
50 days. Commodity stocks rose for a seventh session, weathering
through a late-morning fade, with the appeal of the beaten-down energy
and raw-materials groups enhanced by the dollar’s recent weakness.
The S&P 500
advanced 0.8 percent to 1,995.80 at 4 p.m. in New York, rebounding from a
midday drop of as much as 0.2 percent that erased an early rally. The
index retreated twice after reaching its 50-day moving average at
1,996.57.
Earnings season will
grab an increased share of investors’ attention this week, with Alcoa
Inc. unofficially kicking off the reporting season after markets close
tomorrow. Companies reporting next week include Johnson & Johnson,
Intel Corp. and JPMorgan Chase & Co.
Analysts project
profits for S&P 500 members dropped 6.9 percent in the third
quarter. Still, a Fed measure of corporate income has posted its biggest
quarterly increase since 2012, suggesting the overall picture for
profits may be skewed by downgrades at energy producers combating weak
oil prices.
Among the season’s
early reporters, Yum Brands Inc. tumbled the most in 13 years after the
owner of the KFC, Pizza Hut and Taco Bell chains posted profits that
missed analysts’ estimates. Results were hurt by a lingering slump in
China.
Stocks have swung
between gains and losses since August’s tumble, amid concern about a
slowing global economy triggered by weakness in China, and confusion
over the Federal Reserve’s policy intentions. The S&P 500 has
rebounded 4 percent since ending its worst quarter in four years, and is
up 6.9 percent from an August low reached during the index’s first
correction since 2011.
Expectations for
higher borrowing costs this year have diminished since the
weaker-than-expected September jobs report last Friday. Traders are
pricing in a 39 percent chance of an increase in December and 61 percent
probability of a move higher in March.
Source: Bloomberg
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