UNITED States stocks head into today's trading having risen for the third straight week after oil's retreat and better-than-estimated results from JC Penney Co and Kohl's lifted consumer shares.
JC Penney, Kohl's and Dillard's Inc led a measure of retailers in the Standard & Poor's 500 Index to the highest level since June 5, Bloomberg News reported. The gauge gained 4.8 percent as crude oil slumped 1.2 percent at latest trading to US$113.77 a barrel in New York. The S&P 500's rally was limited after analysts cut profit estimates for banks and brokerage firms and lower fuel prices hurt energy producers.
The S&P 500 climbed 0.2 percent to 1,298.20, extending its rebound from a two and a half-year low on July 15 to 6.9 percent. The Dow Jones Industrial Average decreased 0.6 percent to 11,659.90.
"When we had oil in the US$140s, the red lights were flashing," said Patrick Becker Jr, chief investment officer at Becker Capital Management in Portland, Oregon. "The red lights stopped flashing."
The S&P 500 is still down 12 percent this year, a retreat led by financial companies as losses stemming from the collapse of the US housing market surpassed US$500 billion. All 10 industries in the benchmark index for US equities have fallen. Crude oil's 23-percent retreat since a July record of US$147.27 a barrel has driven a four-week rebound in US stocks.
Retailers in the S&P 500 added 1.8 percent as a group. JC Penney gained the most, rising 12 percent to US$39.94, after the third-largest US department-store chain reported more profit than analysts estimated. Kohl's, the No. 4 chain, climbed 11 percent to US$51.79 as it beat forecasts by 5.1 percent. Dillard's climbed 10 percent to US$11.95.
Home Depot Inc rose 4.4 percent to a two-month high of US$27.53. Lowe's Cos, the second-largest home-improvement retailer behind Home Depot, added 7.6 percent to US$24.50. Home Depot and Hewlett-Packard Co, the biggest personal-computer maker, are scheduled to release second-quarter results tomorrow, the last of the 30 companies in the Dow average to do so. Lowe's reports today.
Second-quarter profits at the 473 companies in the S&P 500 that have posted results were 24 percent lower than a year earlier, according to data compiled by Bloomberg. Excluding financials, whose profits tumbled 94 percent, earnings rose 4.2 percent.
Financial institutions in the S&P 500 fell 2.8 percent last week, the most among 10 industries. Goldman Sachs Group Inc, Morgan Stanley and Lehman Brothers Holdings Inc retreated.