MARKET REPORT

S&P 500 sees 8th-straight gain

— The Standard & Poor’s 500 index closed above 1,500 on Friday for the first time since the start of the recession in 2007, lifted by strong earnings from Procter & Gamble and Starbucks.

The S&P 500 rose 8.14 points to 1,502.96. It was the eighth-straight gain, the longest winning streak since November 2004.

“Earnings have been better than expected,” said Phil Orlando, the New York-based chief equity strategist at Federated Investors Inc. “Guidance has been muted, which would be expected, and it’s still early, but on balance we’ve got to conclude that this first batch of results have been better than the Street’s conservative forecasts.”

The Dow Jones industrial average closed at 13,895.98, up 70.65 points. The Nasdaq composite gained 19.33 points to 3,149.71.

Rising stocks outnumbered falling ones 3-to-2 on the New York Stock Exchange.

Consolidated volume was about average at 3.4 billion shares.

Procter & Gamble, the world’s largest consumer products maker, reported that its quarterly income more than doubled.

P&G also raised its profit forecast for its full fiscal year. Starbucks rose $2.24 to $56.81 after reporting a 13 percent increase in profits.

“Earnings are growing,” said Joe Tanious, a global market strategist at JPMorgan. “The bottom line is that corporate America is doing exceptionally well.”

Tanious expects corporate earnings to grow at about 5percent over the “next year or two,” and stock valuations to rise. Currently, the S&P 500 is trading at an average price-to-earnings ratio of 14, below an average of 15.1 for the past decade, according to FactSet data.

Apple continued to decline, allowing Exxon Mobil to once again surpass the electronics giant as the world’s most valuable publicly traded company.

Stocks have surged this month, with the S&P 500 advancing 5.4 percent.

It jumped at the start of the year when lawmakers reached a last-minute deal to avoid the “fiscal cliff” - automatic spending cuts and tax increases. Stocks built on those gains on optimism that the housing market is recovering and the labor market is healing. The Dow Jones is up 6 percent on the year.

Deutsche Bank analysts raised their year-end target for the index to 1,600 from 1,575.

Companies will be able to maintain their earnings even if lawmakers in Washington decide to implement wide ranging spending cuts to narrow the budget deficit, the analysts said in a note sent to clients late Thursday.

The yield on the 10-year Treasury note, which moves inversely to its price, climbed 11 basis points to 1.95 percent.

Hasbro shares fell $1.14 to $37.31 after the toy maker said its fourth-quarter revenue failed to meet expectations because of poor demand over the holidays.

The company plans to cut about 10 percent of its work force and consolidate facilities to cut expenses.

Green Mountain Coffee Roasters rose $2.53 to $46.31 after an analyst noted that sales of a competing coffee brewer introduced by Starbucks were getting off to a weak start.

Information for this article was contributed by Inyoung Hwang and Sarah Pringle of Bloomberg News.

Business, Pages 32 on 01/26/2013

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