The Standard & Poor’s 500 Index posted its best week since July, rebounding from a technology- driven selloff, as corporate earnings from major Wall Street banks to Yahoo! Inc. surpassed estimates.
Morgan Stanley (NYSE: MS) and Citigroup Inc. (NYSE: C) surged more than 5.6 percent after results beat forecasts. Yahoo! Inc. (Nasdaq: YHOO) soared 11 percent as sales jumped at Alibaba Group Holding Ltd., the China-based e- commerce company it has a 24 percent stake in.
Coca-Cola Co. (NYSE: KO) rose 5.4 percent to $40.72 -- the most in five years after sales volume in North America halted a slide and gains were strong in markets such as China.
UnitedHealth Group Inc. (NYSE: UNH) slid 4 percent to $75.78 for the steepest drop in the Dow after cuts to Medicare pricing hurt results.
The S&P 500 rose four straight days, adding 2.7 percent to 1,864.85 during the holiday-shortened trading week. The Dow Jones Industrial Average climbed 381.79 points, or 2.4 percent, to 16,408.54 for its best week this year.
More than 10 percent of the companies in the equities benchmark disclosed results in the week, with an additional 158 members scheduled to report next week.
Profit for S&P 500 companies probably increased 0.7 percent in the first quarter, analysts now forecast, after anticipating a 0.9 percent decrease as of April 11.
The index rebounded from its worst week since 2012 and is up 0.9 percent for the year. It had dropped 4 percent from an April 2 record as investors sold Internet and biotechnology stocks amid concern that valuations were too high as earnings season began.
The week’s rally left the index 1.4 percent below its all-time high.
The surge reduced volatility, as the Chicago Board Options Exchange Volatility Index sank 22 percent to 13.36. The measure’s biggest weekly decline since January 2013 erased a 22 percent rally in the prior week.
Investors also kept an eye on developments in eastern Ukraine, where the government unleashed an offensive to dislodge militants. Four-way talks on the crisis among U.S., European Union, Russian and Ukrainian diplomats April 17 ended with an accord aimed at taking steps toward de-escalating the conflict.
Economic data in the week indicated gains in manufacturing are helping power the United States out of the winter doldrums, while homebuilding showed signs of lagging behind. Retail sales increased in March as consumers bought more cars, clothing and garden supplies.
Fed Chairwoman Janet Yellen, speaking in New York on April 16, said the central bank has a “continuing commitment” to support the recovery. Three rounds of Fed bond-buying and record-low borrowing costs have helped push the S&P 500 higher by as much as 180 percent from its March 2009 low.
All of the 10 main industries in the S&P 500 advanced at least 1.5 percent over the past four days. Chevron Corp. (NYSE: CVX) rose 5.7 percent to $123.68, helping energy shares jump 4.7 percent as a group.
Financial stocks in the S&P 500 climbed 2.7 percent in the week, following a 4 percent rout in the previous period, as the biggest Wall Street banks reported earnings.
Morgan Stanley advanced 8 percent to $30.76 for its best week since January 2013. The only major bank to report a rise in trading income posted net income that beat estimates. Citigroup gained 5.6 percent to $48.22 after it delivered a surprise increase in earnings and revenue.
Goldman Sachs Group Inc. (NYSE: GS) rose 3.1 percent as an increase in investment-banking revenue boosted profit.
Yahoo soared 11 percent to $36.38 for its best week since October 2011. The Web portal reported its first sales growth in more than a year and profit fell less than analysts estimated. Alibaba posted a 66 percent sales surge and more than doubled its net income for the last quarter of 2013.
Google Inc. (Nasdaq: GOOG) Class C shares added 1 percent to $536.10. The operator of the world’s largest search engine fell 3.7 percent on the final trading day after saying sales fell short of estimates. That trimmed a gain of 4.9 percent in the first three days of the week. The company’s costs are rising as it finds it harder to keep up with a shift to advertising on mobile phones.
The Nasdaq Composite Index rallied 2.4 percent in the week, the most in two months. The gauge fell to within 4 points of its average price in the past 200 days on April 15 before rebounding. The last time the technology-heavy index dropped below that level, considered an important threshold by technical analysts, was Dec. 31, 2012.
The Philadelphia Semiconductor Index climbed 3.2 percent, the biggest gain in a month. Micron Technology Inc. (Nasdaq: MU), the largest U.S. maker of memory chips, surged 13 percent to $23.91. SanDisk Corp. (Nasdaq: SNDK) jumped 13 percent to $82.99, the most in nearly two years. The maker of flash memory for mobile devices boosted its forecast for gross margin this year.
International Business Machines Corp. (NYSE: IBM) dropped 2.7 percent to $190.01 after sales missed estimates amid declining demand for hardware and waning sales in developing countries.