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S&P 500 Erases Loss in Final Minutes of Trading as Financial Shares Rally

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Most U.S. stocks rose, erasing a loss for the Standard & Poor’s 500 Index in the final minutes of trading, as banks gained and results from International Business Machines Corp. (IBM) to Intel Corp. (INTC) boosted technology shares.

JPMorgan Chase & Co. and Bank of America Corp. (BAC) added at least 1.1 percent. IBM, Intel and Microsoft Corp. rose more than 2.9 percent as results beat projections. General Electric Co. closed unchanged, rebounding from a 2.5 percent slump, as profit topped estimates while sales were curbed by Europe. Google Inc. (GOOG) tumbled 8.4 percent as earnings missed projections. American Express Co. slid 1.8 percent on lower-than-forecast sales.

Seven stocks gained for every five falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose 0.1 percent to 1,315.38, extending its gain since Jan. 13 to 2 percent. The index rose for a third week, capping the longest streak since October. The Dow Jones Industrial Average climbed 96.50 points, or 0.8 percent, to 12,720.48. IBM (INDU), which comprises 11 percent of the share-price weighted Dow, added 60.55 points to the index.

“It’s a mixed bag of earnings,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $85 billion, said in a telephone interview. “Earnings growth is going to decline, but that’s already built into the market to a certain extent. If earnings don’t collapse, it won’t be a problem.”

S&P 500 companies, which beat profit estimates in the previous 11 quarters, will report a 3.4 percent increase in per- share earnings during the September-December period, analysts’ forecasts compiled by Bloomberg show. Of the 51 companies in the S&P 500 that reported results since Jan. 9, 33 posted per-share earnings that beat projections, Bloomberg data show.

Economic Data

Sales (ETSLTOTL) of previously owned U.S. homes rose for a third month in December to the highest level since January 2011, a sign the housing market ended last year with momentum. Greek officials and private creditors entered a third day of negotiations on a debt swap deal that’s crucial to lowering the country’s borrowings and freeing up a second round of international aid.

Financial shares had the biggest gain among 10 S&P 500 groups, adding 0.7 percent. JPMorgan rose 1.2 percent to $37.36. Bank of America advanced 1.6 percent to $7.07.

“The upturn is around the corner,” Chris Hyzy, the New York-based chief investment officer at U.S. Trust Co., which oversees about $325 billion, said in a telephone interview. The rebound in banks “is a good sign. The financials have become a more stable sector. That’s the first sign that within six to nine months you could start to see the turnabout in the financial sector.”

IBM gained 4.4 percent to $188.52 after forecasting 2012 earnings that beat analysts’ estimates as fourth-quarter profit rose 4.4 percent because of rising software demand.

Intel, Microsoft (MSFT)

Intel increased 2.9 percent to $26.38. The chipmaker predicted first-quarter revenue that may top analysts’ estimates, signaling that the shortage of disk drives that throttled personal computer production may be ending.

Microsoft added 5.7 percent to $29.71. The company’s Xbox business got a boost from Christmas shoppers, who snapped up its video-game consoles and Kinect sensor controllers, and signed up for the Xbox Live online service.

GE (GE) closed unchanged at $19.15. Profit topped estimates after the company’s industrial order backlog rose to a record $200 billion even as weaker demand in Europe hindered sales in health care.

Read More: http://www.bloomberg.com/news/2012-01-20/u-s-stock-futures-decline-amid-greek-talks-google-slumps-as-ibm-advances.html

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