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U.S. Stocks Rise as ECB Cuts Rate, Jobless Claims Fall

*from www.bloomberg.com, May 2, 2013 (To view original article click here.)

Take Away #1: U.S. stocks rose, with the S&P 500 Index erasing most of yesterday’s decline, as the European Central Bank cut its key interest rate and American jobless claims unexpectedly fell.

Key Facts and Figures:

  • The S&P 500 rose 0.8% to 1,595.41 at 12:28 p.m. in New York.
  • The Dow Jones Industrial Average gained 106.19 points, or 0.7%, to 14,807.14.
  • Trading in S&P 500 stocks was in line with the 30-day average during this time of day.
  • “Central banks around the world are saying, ‘Take risk, Take risk,’’ and investors have responded by taking risk,” Sandy Lincoln, with BMO Global Asset Management.
  • “Valuations seem to be reasonable. You got initial claims coming down. There are plenty of positives,” said Lincoln.
  • The big negatives are this macro issue of whether or not we’re going to have a global rollover, which we don’t think is in the card,” Lincoln said.

Take Away #2: ECB policy makers meeting in Bratislava lowered the main refinancing rate to 0.5% from 0.75%.

Key Facts and Figures:

  • The move was predicted by 45 of 70 economists in a Bloomberg News survey.
  • “Our monetary policy will remain accommodative for as long as needed” and officials “will monitor very closely all incoming information” in the months ahead, said ECB President Mario Draghi.
  • Drahgi said the ECB will continue to lend banks as much money as they need at least until mid-2014.
  • Stock futures pared gains after Draghi said policy makers had an open mind on a negative deposit rate.

Take Away #3: The S&P lost 0.9% yesterday, the biggest drop in two weeks, as U.S. payrolls and manufacturing grew less than forecast.

Key Facts and Figures:

  • The equity gauge reached an all-time high of 1,597.57 on April 30 as the bull market entered its fifth year.
  • The S&P 500 surged 136% from a 12-year low in 2009, driven by better-than-expected corporate earnings and three rounds of bond purchases by the Federal Reserve.
  • The Fed said yesterday it will keep buying bonds at a monthly pace of $85 billion while standing ready to raise or lower purchases as the economy changes.

Take Away #4: The number of Americans filing claims for jobless benefits unexpectedly dropped to the lowest level in more than five years.

Key Facts and Figures:

  • Data showed the productivity of U.S. workers rose in the first quarter as companies focused on containing labor expenses.
  • A report tomorrow is projected to show U.S. unemployment stayed at 7.6% in April, while payrolls rose 145,000.
  • That is compared with an increase of 88,000 the prior month, according to the median estimates of economists in a Bloomberg survey.
  • “The key thing that you need to make people feel OK is to simply add jobs and ideally lower the unemployment rate,” said Ethan Anderson of Rehmann Financial.
  • “It’s looking like the goldilocks type of scenario where the economy grows, but not too fast for the Fed to stop helping, but not too slow to impede earnings growth,” said Anderson.

Take Away #5: Of the 381 companies in the S&P 500 that have reported results so far, 73% exceeded analysts’ earnings projections.

Key Facts and Figures:

  • Of those same companies, 53% have missed on sales, data compiled by Bloomberg show.
  • Profit at S&P 500 companies rose 1.1% in the first three months of the year, according to estimates compiled by Bloomberg.

Take Away #6: Investors cut demand for protection against losses in the S&P 500.

Key Facts and Figures:

  • The Chicago Board Options Exchange Volatility Index, or VIX, slid 4.4% to 13.85 today.
  • The gauge for options hit a six-year low in March and is down 23% this year.

Take Away #7: Nine out of 10 industry groups in the S&P 500 advanced as energy, technology, and healthcare companies rose the most, climbing at least 1.1%.

Key Facts and Figures:

  • Facebook advanced 4.1% to $28.55.
  • First-quarter sales surged 38% to $1.46 billion, a sign that CEO Mark Zuckerberg is making headway in a drive to make more money from mobile advertising.
  • Profit excluding certain items was 12 cents a share, compared with an average analyst prediction of 13 cents.
  • General Motors gained 4.5% to $31.55.
  • The automaker, after losing more than $18 billion in Europe since 1999, narrowed its first-quarter loss in the region, outpacing Ford Motor Co. and helping it beat analysts’ earnings estimates.
  • MetLife, the largest U.S. life insurer, added 3.6% to $39.79 and reported a first-quarter profit compared with a year earlier loss, as CEO Steven Kandarian expands outside the U.S.
  • Kandarian is searching for customers in faster-growing economies and reducing expenses as slow expansion in the company’s main markets weighs on results.
  • Prudential rose 7.6% to $63.76, as the No. 2 U.S. life insurer also posted results that exceeded analysts’ estimates.
  • Visa Inc. (V) climbed 7% to a record $177.66.
  • The biggest payments network posted quarterly profit that beat analysts’ estimates as spending on credit and debit cards rose.
  • Gilead Sciences Inc. climbed 4.9% to $52.57, and said it plans to begin further study evaluating a therapy for the treatment of chronic hepatitis C.
  • Harman International Industries Inc. (HAR) rose 6.4% to $47.01.
  • The maker of car infotainment systems increased its full-year profit forecast as quarterly earnings beat analysts’ estimates.
  • Yelp Inc., the consumer-review website, rallied 25% to $31.68.
  • Yelp reported first-quarter revenue that topped estimates, helped by an expansion into new markets and a jump in local advertising.
  • International Paper Co. (IP), the world’s largest maker of office paper, slipped 3.3% to $44.39.
  • IP reported operating profit of 65 cents a share in the first quarter, trailing the average analyst estimate of 74 cents in a Bloomberg survey.

*To view original article from www.bloomberg.com click here.

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