U.S. stocks rose for the fifth week, giving the Standard & Poor’s 500 Index the longest rally since March, amid better-than-expected earnings and optimism that global central banks will take actions to stimulate growth.
Cisco Systems Inc., Alcoa Inc. and Hewlett-Packard (HPQ) Co. rose at least 7.3 percent, driving the Dow Jones Industrial Average (INDU) to its longest winning streak since October. Raw-material producers rose the most among 10 S&P 500 groups, as International Flavors & Fragrances Inc. (IFF) climbed 11 percent on better-than-estimated earnings. Knight Capital Group Inc., the firm driven to the brink of bankruptcy by trading losses, tumbled 28 percent after receiving a cash infusion.
The S&P 500 advanced 1.1 percent for the week to 1,405.87, extending its 2012 gain to 12 percent. The Dow climbed 111.78 points, or 0.9 percent, to 13,207.95. The Chicago Board Options Exchange Volatility Index (VIX), a benchmark gauge for options that protect against losses in the S&P 500, slipped 5.8 percent to 14.74, the lowest level since March.
“The risk-on trade is back,” Scott Armiger, a money manager at Christiana Trust in Greenville, Delaware, which has $11 billion in client assets, said in a phone interview. “People think things are on a much better footing now. No matter what they do, it’s either if the numbers are good, then we’re recovering, or if the number are bad, the Federal Reserve will stimulate and we’ll still move up.”
Equities advanced as German Chancellor Angela Merkelbacked a bond-buying proposal by the European Central Bank. A collapse in China’s exports added to signs the global economy is weakening, stoking speculation the government will step up measures to support expansion. In the U.S., central bank officials debated whether more action is needed to stimulate growth.