US stocks rose modestly putting the S&P 500 on track to build on its biggest gain in nearly a month, after strong data and earnings from Bank of America pointed to continued improvement in the economy.
Bank of America (BAC.N) shares climbed 2.7 percent to $17.22 as one of the biggest boosts to the S&P 500 after the second-largest US bank reported stronger-than-expected quarterly profit, driven by a steep fall in provisions to cover bad loans. The S&P financial index advanced 0.7 percent.
Data showed the seasonally adjusted producer price index rose 0.4 percent last month, the biggest rise since June, although inflation pressures remained benign.
In addition, the New York Federal Reserve’s «Empire State» index of general business conditions rose to its highest level in 20 months.
Investors have been concerned that stock prices may have become extended and are looking to earnings season to justify further gains in equity prices. The S&P 500’s forward price to earnings ratio is at its highest level in nearly seven years. The benchmark S&P 500 surged about 30 percent in 2013.
Later in the session, the Federal Reserve will release its Beige Book of economic conditions.
The Dow Jones industrial average rose 43.96 points or 0.27 percent, to 16,417.82, the S&P 500 gained 5.13 points or 0.28 percent, to 1,844.01 and the Nasdaq Composite added 18.313 points or 0.44 percent, to 4,201.329.
The S&P 500 rose 1.1 percent on Tuesday, its biggest climb since December 18, as a strong December retail sales reading eased concerns that economic growth might be slowing and stocks may be expensive.
General Motors Co (GM.N) said it will pay the first quarterly dividend on its common stock in almost six years. The automaker’s new executive team said while it expects a slight uptick in pretax profits this year, margins likely would remain flat until 2015. GM’s shares lost 0.9 percent to $39.66.
Source: Buenos Aires Herald