STOCKS ROSE AS manufacturing in the New York region offset smaller-than-expected increases in retail sales in June.
BLOOMBERG NEWS FILE PHOTO/JIN LEE
By Alex Barinka and Nikolaj Gammeltoft Bloomberg News
NEW YORK – U.S. stocks rose as manufacturing in the New York region expanded more than forecast and Citigroup Inc. rallied, offsetting data showing retail sales in June increased less than expected.
Citigroup rose 2.3 percent after second-quarter profit beat analysts’ estimates as stock-trading revenue surged and losses on unwanted assets declined.
The Standard & Poor’s 500 Index climbed 0.1 percent to 1,681.82 at 9:32 a.m. in New York.
“We have our focus on earnings,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said by phone. “Citigroup had a good report this morning and the question is whether earnings will be strong enough to push us higher. That’s where the short-term focus will be.”
The S&P 500 closed at a record last week after Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus. The gauge added 3 percent through the five days, for a third week of gains and its biggest rally since Jan. 4.
An unprecedented three rounds of central bank stimulus have helped drive the S&P 500 up 148 percent from a 12-year low in 2009. The index slumped as much as 5.8 percent after Bernanke signaled on May 22 that the Fed could start scaling back bond purchases as soon as September. Stocks have since recovered all those losses as data on hiring and housing bolstered confidence in the economic recovery.
Manufacturing in the New York region expanded in July at the fastest pace in five months as the area’s factory activity stabilized amid a slowdown in growth. The Federal Reserve Bank of New York’s general economic index climbed to 9.5 from 7.8 last month. Readings greater than zero signal expansion in New York, northern New Jersey and southern Connecticut. The median projection in a Bloomberg survey of 50 economists called for a reading of 5.
Retail sales rose less than projected in June as demand cooled at building materials outlets and restaurants. The 0.4 percent gain followed a 0.5 percent increase in May that was less than previously reported, Commerce Department figures showed today. The median forecast of 82 economists surveyed by Bloomberg called for a 0.8 percent advance.
China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier, according to the National Bureau of Statistics in Beijing. That equaled the median forecast in a Bloomberg News survey. The economy expanded at a 7.7 percent pace in the first quarter.
“The Chinese GDP data reassured investors that China will not derail the global growth recovery,” Stephane Ekolo, chief European strategist at Market Securities, wrote in an e-mail.
Investor are also watching earnings. Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg.