BLBG : U.S. Stocks Advance as GE Leads Gains in Industrial Shares
Sept. 9 (Bloomberg) -- U.S. stocks gained for a fourth straight day as General Electric Co. led gains in industrial shares and investor Michael Price said he’s finding value in American equities.
General Electric added 1.6 percent to above its highest close since January. EBay Inc. climbed 3.3 percent after Sanford C. Bernstein & Co. said the company’s core online auction business is “turning around.” MasterCard Inc. and Capital One Financial Corp. advanced after they were upgraded by Citigroup Inc. on expectations that credit spending will improve.
The Standard & Poor’s 500 Index added 0.3 percent to 1,028.79 as of 9:58 a.m. in New York. The Dow Jones Industrial Average rose 27.89 points, or 0.3 percent, to 9,525.23. Europe’s benchmark index added 0.7 percent, climbing for a fifth straight day, while Asia’s slumped 0.6 percent.
Price said the U.S. stock market resembles 1975-1982, when the S&P 500 doubled, and he’s finding value in small banks.
“We made very good returns from ‘75 to ‘82,” Price, who managed some of the best-performing mutual funds during the 1980s and 1990s and now runs New York-based MFP Investors LLC, said in an interview broadcast on Bloomberg Radio and Television. “Pick your spots, pick your stocks, do your work, and somebody’s going to be selling something too cheaply.”
EBay, owner of the most visited U.S. e-commerce Web site, advanced 3.3 percent to $22.56 after Bernstein raised its rating to “outperform” from “market perform” and lifted its share- price estimate 17 percent to $28.
MasterCard
MasterCard, the second-biggest credit-card network after Visa Inc., rose 0.4 percent to $208.32. Capital One, the McLean, Virginia-based credit-card company, climbed 3.3 percent to $36.61. “The credit cycle has begun to recover for U.S. credit cards,” Citigroup’s Donald Fandetti wrote in a report.
Morgan Stanley climbed 1 percent to $28.07. The sixth- biggest U.S. bank by assets was raised to “overweight” from “neutral” by analysts at JPMorgan Chase & Co., who said they are “switching preference from investment banks to credit banks on regulatory changes.”
The S&P 500 has rebounded 52 percent from a 12-year low on March 9 as reports from consumer confidence to home sales signaled the recession is easing and companies from Johnson & Johnson to Goldman Sachs posted earnings that beat analysts’ estimates. The Federal Reserve will publish its Beige Book business survey today at 2 p.m. in Washington.
The rally has pushed valuations in the benchmark index for U.S. equities to about 18.9 times the reported earnings of its companies, near the highest level since June 2004, according to weekly data compiled by Bloomberg.
‘Be Prepared’
“Investors should be prepared for some additional near- term corrective action,” Robert Doll, the global chief investment officer at BlackRock Inc., wrote in an e-mail to journalists yesterday. “Stocks are no longer as cheap as they were several months ago. Conditions may be overbought and there is still a great deal of uncertainty over the outlook.”
Lazard Ltd. dropped 3.5 percent after the investment bank led by Bruce Wasserstein said some shareholders agreed to sell 5.22 million shares in an underwritten public offering. The shares declined $1.60 to $37.40. Lazard said it won’t receive any proceeds from the sale.
Vivus Inc. soared 77 percent to $12.26. The developer of treatments for sexual dysfunction and obesity said its Qnexa drug helped patients lose enough weight in studies to allow the biotechnology company to seek U.S. approval to sell the treatment this year.
