S&P 500 extends record as Facebook rallies

U.S. stocks rose, with the Standard & Poor’s 500 Index extending a record, as Facebook Inc. rallied on higher sales and growth in global manufacturing offset a drop in home sales. More

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S&P 500 extends record as Facebook rallies

Posted 7/24/14

NEW YORK – U.S. stocks rose, with the Standard & Poor’s 500 Index extending a record, as Facebook Inc. rallied on higher sales and growth in global manufacturing offset a drop in home sales.

Facebook jumped 5.1 percent after saying second-quarter sales surged 61 percent. Under Armor Inc. surged 16 percent after increasing its 2014 profit target. Caterpillar sank 3.3 percent after forecasting full-year profit that fell short of estimates. AT&T Inc. dropped 0.6 percent as earnings missed forecasts. Qualcomm Inc. declined 6.3 percent after forecasting quarterly profit that may trail projections.

The S&P 500 added 0.2 percent to a record 1,990.74 at 12:09 p.m. in New York. The Dow Jones Industrial Average climbed 14.93 points, or 0.1 percent, to 17,101.56. Trading in S&P 500 stocks was 25 percent above the 30-day average at this time of day.

“Earnings are coming in better than expected and the market has taken a queue from that but the economy overall is kind of a mixed bag,” John Kvantas, director of equity research at USAA Investments, said in a phone interview. He helps oversee $63 billion in mutual fund assets.

The S&P 500 rose 0.2 percent on Wednesday as Apple Inc. helped push technology companies higher, while health-care stocks rallied on earnings. The gauge has advanced 7.5 percent this year through Wednesday amid better-than-estimated corporate results and central-bank support. The index trades at 18.2 times the reported earnings of its members, the highest since 2010.

Data watch

Global equities advanced Thursday after reports showed euro-area manufacturing and services grew this month while Chinese factory activity rose to an 18-month high in July.

A Markit Economics Ltd. factory gauge for the U.S. unexpectedly declined to 56.3 in July from 57.3 the previous month. Readings above 50 indicate expansion.

Separate data showed fewer new U.S. homes were sold in June than forecast and May data showed the biggest downward revision on record, painting a picture of a housing market that is struggling to gain traction.

Another release showed the number of Americans filing applications for unemployment benefits unexpectedly dropped last week to the lowest level in more than eight years.

The International Monetary Fund lowered its outlook for global growth this year as expansions weaken from the U.S. to China and military conflicts raise the risk of a surge in oil prices.

Ukraine tensions

Investors are also weighing the threat of new European Union sanctions targeting Russia over the Krelmin’s actions in Ukraine. Among the options being considered is a ban on European purchases of bonds or shares sold by Russia’s state-owned banks, according to a proposal presented to member states.

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