Oct. 19 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to a one-year high, on better-than-estimated earnings and speculation the economy is healthy enough for policy makers to unwind efforts to shore up the financial system. The dollar fell, while commodity prices and 10-year Treasuries advanced.
Gannett Co., the biggest U.S. newspaper publisher, jumped 8.2 percent on results that beat estimates. Texas Instruments Inc. climbed before reporting earnings. Caterpillar Inc. surged 6 percent after RBC Capital Markets recommended the shares. Banks advanced as the Federal Reserve Bank of New York said it is assessing the use of reverse repurchase agreements to drain record amounts of cash added to the financial system.
“The stock market wants to move higher,” said Michael Levine , a money manager at New York-based OppenheimerFunds Inc., which oversees about $165 billion. “Corporate earnings have been in line or better-than-expected. I see a positive tone through the end of the year.”
The Standard & Poor’s 500 Index climbed 0.9 percent to 1,097.91 at 4:06 p.m. in New York, adding to gains from a back- to- back weekly advance. The Dow Jones Industrial Average jumped 96.28 points, or 1 percent, to 10,092.19. The MSCI World Index of 23 developed countries rallied 1.3 percent. Four stocks rose for each that fell on the New York Stock Exchange.
Earnings at U.S. companies probably will exceed analysts’ third-quarter estimates, extending a rally in stocks to year- end, Nomura Holdings Inc. wrote in a note dated Oct. 16. Thirty- four of the 41 companies in the S&P 500 that reported since Oct. 7, including JPMorgan Chase & Co. and Intel Corp., surpassed analysts’ projections, according to Bloomberg data.
More than 130 other companies in the S&P 500 are scheduled to report this week. The benchmark index for American equities has rallied 62 percent from a 12-year low in March on speculation the economy is emerging from the worst recession in seven decades.
“We’ll have lots of earnings reports this week,” said Tom Wirth , senior investment officer at Chemung Canal Trust Co., which manages $1.6 billion in Elmira, New York. “The trend so far has been positive and there’s expectation that will continue. That’s positive for stocks. It’s very possible that we near 1,200 on the S&P 500 by the end of the year.”
Analysts surveyed by Bloomberg estimate profits for S&P 500 companies will rebound 65 percent in the last three months of the year after falling for nine straight quarters, the longest streak since the Great Depression.
Consumer Discretionary Rally
Gannett rose 8.2 percent to $14.06. The publisher had third- quarter profit of 44 cents a share on an adjusted basis, beating the average analyst estimate by 3 cents as the decline in print advertising abated.
Nordstrom added 4.2 percent to $35.85. The department store chain had its share-price estimate increased to $40 from $25 at Barclays Plc, which said earnings will continue to improve for the rest of the year because of recovering sales and low inventories.
Eaton Corp . climbed 5.7 percent to $63.89. The Cleveland- based manufacturer reported third-quarter profit excluding some items of $1.21 a share, higher than the 95-cent average estimate of analysts in a survey. Eaton also said earnings this year will be higher than previously estimated.
Texas Instruments and Apple Inc. climbed before reporting results. Texas Instruments, the second-largest U.S. chipmaker, rose 3.4 percent to $23.52. Apple, the maker of Macintosh computers, the iPhone and the iPod media player, gained 1 percent to $189.86