COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

S&P 500 climbs to record on home sales, central bank optimism

Stocks moved broadly higher Monday as investors focused on the possible easing of credit policies by central banks in Europe and elsewhere.

The Dow Jones Industrial Average closed at 14,818.75, up 106.20 points and less than 50 points away from an all-time high. However, the S&P 500 Stock Index did establish a record high, rising 11.37 points to 1,593.61. The Nasdaq Composite Index rose 27.76 points to 3,307.02.

The Federal Reserve will begin a two-day meeting Tuesday of its open market committee to review current economic conditions and interest rates. It is expected the committee will maintain its current policy positions.

The possibility of continued easing pushed commodities higher. Gold rose $13.80 to $1,467.40 an ounce. Oil added $1.50 to $94.50 a barrel.

Apple Inc. (Nasdaq: AAPL) jumped 3.1 percent to pace a rally in technology shares. Tenet Healthcare Corp. (NYSE: THC) surged 6.5 percent as hospitals will get a pay raise from the U.S. government for treating Medicare patients. Actavis Inc. (NYSE: ACT) and Valeant Pharmaceuticals International Inc. (NYSE: VRX) rose more than 3.8 percent as the companies are said to have been in merger talks. Moody’s Corp. (NYSE: MCO) gained the most in the S&P 500 after being part of a settlement with investors claiming inflated ratings.

“There’s just a positive tone to the market in part because recent lackluster economic trends have reinforced investors belief that the Federal Reserve will continue to press on the gas pedal,” Chad Morganlander, a Florham Park, N.J.-based fund manager at Stifel Nicolaus & Co., which oversees about $130 billion, said by telephone.

Nine S&P 500 companies report earnings Monday, including Express Scripts Holding Co. (Nasdaq: ESRX) and Loews Corp. (NYSE: L) Of the 273 companies that have reported earnings so far this month, 74 percent exceeded analysts’ profit predictions, while 55 percent missed sales estimates, data compiled by Bloomberg show.

“We feel visibility on earnings is pretty darn good,” Paul Mangus, head of equity research and strategy at Wells Fargo Private Bank in Charlotte, N.C., said in a phone interview. His firm oversees $170 billion. “We are seeing some indications that earnings momentum is likely to pick up in future quarters.”

The Chicago Board Options Exchange Volatility Index, or VIX, rose 0.7 percent to 13.71. The gauge for options that are used to protect against losses in the S&P 500 reached a six-year low in March and is down 24 percent this year.

Morgan Stanley (NYSE: MS) rose 3.8 percent to $22.21 after settling claims brought by the investor group that it had acted negligent in conveying ratings that it should have known were inaccurate.

The Bloomberg U.S. Airlines Index rallied 1.1 percent. United Continental Holdings Inc. (NYSE: UAL) increased 2.8 percent to $32 while Delta Air Lines Inc. (NYSE: DAL) rose 0.8 percent to $16.95.

Biogen Idec Inc. (Nasdaq: BIIB) climbed 4.7 percent to a record $223.61. The introduction of the company’s multiple sclerosis pill, Tecfidera, outstripped the initial sales of competing drugs from Novartis AG and Sanofi, suggesting the treatment may beat estimates for the year. Total prescriptions more than doubled during the third week of the launch to 730 from 332 the previous week, according to a Wells Fargo & Co. (NYSE: WFC) report.

Conceptus Inc. (Nasdaq: CPTS) surged 20 percent to a record $30.96. The company agreed to be bought by Bayer AG for about $1.1 billion in cash, or $31 a share.

Roper Industries Inc. (NYSE: ROP) fell 3.8 percent to $118.68. The company forecast second-quarter earnings of no more than $1.30 a share. That trailed the average analyst estimate of $1.38 in a Bloomberg survey.

Eastman Chemical Co. (NYSE: EMN) slipped 1 percent to $68.27 after JPMorgan Chase & Co. (NYSE: JPM) cut the stock’s rating to neutral from overweight.

Bloomberg News contributed to this report.

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