Sept. 3 (Bloomberg) -- U.S. stocks rose, snapping a four- day losing streak for the Standard & Poor’s 500 Index, as chain stores from Costco Wholesale Corp. to Gap Inc. reported sales that topped projections and Chinese equities rallied the most in six months. Costco posted the steepest gain in the S&P 500, rallying as much as 9 percent, after the largest U.S. warehouse club boosted overseas revenue. Gap added 7.2 percent on August sales that fell half as much as analysts’ estimated. Bank of America Corp. and Alcoa Inc. led the Dow Jones Industrial Average higher following a 4.8 percent advance in the Shanghai Composite Index. “If China continues to grow, then it’ll become the engine for the world,” said Jonathan Vyorst, senior vice president at New York-based Paradigm Capital Management Inc., which oversees about $1.7 billion. “We may have just had a little hiccup in a stronger bull market.” The S&P 500 climbed 0.4 percent to 998.64 at 12:13 p.m. in New York after tumbling 3.3 percent over the previous three days. The Dow average added 30.46 points, or 0.3 percent, to 9,311.13. The MSCI World Index of 23 developed countries rose 0.3 percent. The S&P 500 snapped its longest losing streak since May even as jobless claims topped forecasts and a report on service industries failed to bolster speculation that the economic recovery will be strong enough to justify a six-month rally in equities. The government is scheduled to release its monthly jobs report tomorrow and may say the unemployment rate climbed to 9.5 percent in August, the highest level since 1983. Costco Jumps Costco Wholesale Corp. rose 8.4 percent to $54.92. Costco’s sales declined 2 percent, less than the 5.6 percent estimated. Gap added 7.2 percent to $21.10. The operator of Old Navy and Banana Republic clothing stores said sales at stores open at least a year fell 3 percent in August from a year earlier, less than the 6.7 percent estimated. American Eagle Outfitters Inc. jumped 8 percent to $14.66. The retailer of clothing for 15-to 25-year-olds said August sales at stores open at least a year fell 7 percent from a year earlier, less than the 8.9 percent estimated by Retail Metrics. Bank of America added 3.6 percent, while Alcoa climbed 3.7 percent after boosting its forecast for global aluminum demand because of stimulus spending in China. S&P 500 financial shares climbed 1.8 percent collectively for the best gain among 10 groups. Ciena, Del Monte Ciena Corp. added 5.6 percent to $12.96. The maker of fiber-optic network gear that provides faster data-download speeds reported a third-quarter loss of 5 cents a share. Analysts estimated a 14-cent loss, according to the average forecast in a Bloomberg survey. Del Monte Foods Co. rose 8.5 percent to $11.24. The maker of canned fruit and Meow Mix cat food reported fiscal first- quarter profit excluding some items of 30 cents a share, more than seven times the 4-cent average estimate of seven analysts in a Bloomberg survey. Chinese stocks jumped after Liu Xinhua, vice chairman of the China Securities Regulatory Commission, said authorities will promote a “stable and healthy” market, tempering concern the government wants to curb equity speculation. Ministers from the Group of 20 nations are likely to suggest the global economy is healing when they meet in London this weekend, while the European Central Bank kept interest rates at a record low today. ‘Massive’ “The contribution of China to the global growth recovery story is massive,” said Michael Ganske, head of emerging markets strategy at Commerzbank AG in London. “That’s part of why everybody is so obsessed.” The Shanghai stock index has climbed for the past three days after slumping 22 percent last month as banks reined in lending to avert asset bubbles and policy makers advised industries from steel to cement to curb overcapacity. The measure had rallied 103 percent from a November low on prospects a 4 trillion yuan ($586 billion) stimulus package and record lending would revive growth in the world’s third-largest economy. China’s stock market has foreshadowed moves in global equities the past two years. It peaked on Oct. 16, 2007, two weeks before the MSCI All-Country World Index. The Shanghai index fell 72 percent from its 2007 high and bottomed on Nov. 4, 2008, four months before the MSCI index. To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.

Source