U.S. stocks advance with S&P 500 heading toward gains for year

NEW YORK – U.S. stocks rose, with gains in banks and drugmakers helping to turn the Standard & Poor’s 500 Index positive for the year as the gauge headed for its longest weekly winning streak since November.

The equity benchmark is poised to join the Dow Jones Industrial Average in posting an increase for 2016, staging one of the biggest turnarounds in history. The Dow surged 12 percent in 24 days through Thursday, boosted by seven separate daily advances exceeding 1 percent. It’s a stunning comeback from what was the worst-ever start to a year, with stocks pushed over the top as the Federal Reserve this week signaled a slower pace of interest-rate increases.

The S&P 500 added 0.4 percent to 2,048.62 at 12:46 p.m. in New York, turning positive for the year after closing yesterday at the highest since Dec. 31. The Dow climbed 101.70 points, or 0.6 percent. to 17,583.19, and the Nasdaq Composite Index advanced 0.5 percent.

“Oil is clearly a near-term positive and we’ve already heard from the Fed,” said Terry Sandven, who helps oversee $126 billion as chief equity strategist at U.S. Bank Wealth Management in Minneapolis. “It’s been a good week and a great month for equities as stocks have benefited from the winds of change. Many of the items that have plagued sentiment and overall equity returns, really since the beginning of the year, seem to be of less of an immediate concern.”

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Trading in U.S. equities may be subject to unexpected swings Friday because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and individual stocks expire. Trading volume in S&P 500 shares was 25 percent above the 30-day average for this time of day.

Stocks on the verge of a fifth weekly advance, with the S&P 500 rebounding 12 percent from a Feb. 11 low amid rising crude prices and optimism that monetary policy will continue to support global growth. Friday’s gains were braced by banks, which were on pace to halt a three-day slide after also lagging a broader rally in the past two weeks. Health-care shares rose for the first time in five days, on the way to ending the longest losing streak in two months.

An advance of 0.9 percent in the Dow average Thursday wiped out a year-to-date decline that swelled to as much as 10 percent in February. It’s the fastest that a retreat of that size or more has ever been reversed this early in a year, data compiled by Bloomberg show. The S&P 500 has climbed 1.3 percent this week, and on track to close higher for the year after falling as much as 11 percent.

The Chicago Board Options Exchange Volatility Index fell 3.3 percent Friday to 13.96, headed for a seven-month low. The measure of market turbulence known as the VIX is on pace for the longest streak of weekly declines in four years.

Energy and raw-materials have led the S&P 500 over the last five weeks with gains of more than 16 percent. Energy companies are poised for longest streak of weekly advances in 10 months, while raw-materials producers are headed toward the best such stretch since November 2014. A tumble in the dollar Thursday brought on by a more dovish Fed helped push the two groups to three-month highs yesterday.

The Fed’s tempered outlook for rate increases knocked down traders’ expectations as reflected in futures prices, according to data compiled by Bloomberg. Odds for a June boost to borrowing costs are at almost 37 percent, compared with about 54 percent before the Fed’s statement Wednesday.

Probabilities for rate increases had risen in the past month amid better U.S. data, higher crude prices and a rebound in equities. A report today showed consumer confidence eased in the first half of March as lower-income Americans grew more concerned about prospects for the economy and higher gasoline prices.

“A lot of investors who missed out on the rally are feeling the pressure to go back into the market, especially with the index turning positive for the year,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “The recovery was pretty stunning and it happened pretty quick. This rally could go on till the end of April.”

Among shares moving on corporate news, Adobe Systems Inc. climbed 4.1 percent after reporting a profit that topped analysts’ estimates as more customers signed up for its cloud-based services.

Starwood Hotels & Resorts Worldwide Inc. added 4.7 percent as the owner of brands such as Westin, Sheraton and W said it plans to accept a $13.2 billion takeover bid by China’s Anbang Insurance Group Co. and gave suitor Marriott International Inc. a deadline to make a counteroffer.

Six of the S&P 500’s 10 main industries rose, led by a 1.3 percent surge for health care shares, while financial companies increased 0.7 percent. Industrials rose 0.6 percent. Consumer staples were little changed after falling as much as 0.3 percent earlier. Phone companies slipped 0.3 percent.

Banks led a climb in financial stocks, as the KBW Bank Index rose 1.5 percent toward a two-month high. Bank of America Corp. climbed 2.6 percent after the company said its board approved the repurchase of as much as $800 million in shares, a day after JPMorgan Chase & Co. said it can expand its buyback program. JPMorgan added 2.2 percent.

Industrial companies extended a three-day gain to 3.3 percent, paced by rising airline shares. American Airlines Group Inc. and Delta Air Lines Inc. added more than 2.5 percent. Caterpillar slumped 1.3 percent after the company said rolling three-month machine sales fell 21 percent in February, following a 15 percent decline the prior month.

Wynn Resorts Ltd. jumped 6.7 percent to a seven-month high, while Chipotle Mexican Grill Inc. sank 3.1 percent, bringing its four-day losses to more than 11 percent after earlier this week projecting its first quarterly loss since the company went public.

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