(Bloomberg) -- U.S. stocks advanced, rebounding from the worst drop in the Standard & Poor's 500 Index since February, after oil's retreat from a record and rising sales at McDonald's Corp. boosted confidence consumers will keep spending.
McDonald's, the world's largest restaurant company, gained following its report that sales in the U.S. and Europe improved in May. Wal-Mart Stores Inc., the biggest retailer, rose after Saudi Arabia's Oil Minister Ali al-Naimi said an 8.8 percent surge in crude prices last week was ``unjustified.'' Energy stocks jumped after Goldman Sachs Group Inc. said they are cheap relative to the price of crude.
The Standard & Poor's 500 Index added 7.49, or 0.6 percent, to 1,368.17 as of 10:32 a.m. in New York after the gauge fell the most since Feb. 5 in the last session. The Dow Jones Industrial Average increased 110.89, or 0.9 percent, to 12,320.89. The Nasdaq Composite Index slid 6.71, or 0.3 percent, to 2,467.85. About eight stocks advanced for every five that dropped.
``The consumer isn't falling off a cliff,'' said Nick Sargen, who helps oversee $30 billion as chief investment officer of Fort Washington Investment Advisors in Cincinnati. ``A reversal in oil prices would be a plus.''
The S&P 500 slid 3.1 percent and the Dow lost 395 points in last week's final session following a jump in the unemployment rate and a $10-a-barrel rise in crude oil. The S&P 500 trimmed its rally from a 19-month low in March to 6.9 percent.
Average Rebound
The Dow industrials rose an average of 0.45 percent following its 13 biggest Friday losses since 1991, according to Birinyi Associates Inc. The decline on June 6 was the fifth- steepest in the period, the Westport, Connecticut-based research firm wrote in a note yesterday.
``When you get these steep sell-offs on one day, you typically get some recovery the next,'' Mike Ryan, head of wealth management research for the Americas at UBS Financial Services Inc. in New York, said in an interview with Bloomberg Television. ``We're likely to get some bounce back.''
Crude oil for July delivery declined as much as $3.27, or 2.4 percent, to $135.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
The recent gain in prices is being driven by non-fundamental factors, the state-owned Saudi Press Agency reported after a meeting between Al-Naimi and his Pakistani counterpart yesterday.
McDonald's added $2.28, or 4 percent, to $59.23. The maker of the Big Mac hamburger boosted same-store sales in Europe by 9.6 percent and 9.7 percent in Asia, the Middle East and Africa. Same-store sales in the U.S. rose 4.3 percent as McDonald's breakfast menu helped attract customers, the restaurant operator said.
Overseas Sales
Investors should buy U.S. companies with more international sales and sell those with no overseas revenue as higher economic growth abroad creates a disparity in profits between the groups, Goldman Sachs Group Inc. said on June 6.
Wal-Mart rose 76 cents to $59.13. The retailer dropped on June 6 by the most since January. Ford gained 18 cents to $6.22.
Energy stocks climbed 1.9 percent, the most among 10 industries in the S&P 500, after Goldman Sachs Group Inc. recommended investors buy ConocoPhillips, Hess Corp., Chevron Corp. and Suncor Energy Inc. The world's biggest energy companies are cheap relative to the price of oil, Goldman wrote in a report to investors.
``Crude oil supply and demand fundamentals remain bullish,'' analyst Arjun Murti said.
Homebuilders climbed after the number of Americans signing contracts to buy existing homes unexpectedly increased in April. The index of pending home resales added 6.3 percent to 88.2, the highest level in six months, the National Association of Realtors said. Economists projected the index would fall 0 percent, according to the median forecast in a Bloomberg News survey.
D.R. Horton Inc. added 24 cents, or 2.1 percent, to $11.88.
Banks Advance
Financial stocks advanced after CIT Group Inc., the commercial lender trying to escape a cash squeeze, received $3 billion in financing from Goldman Sachs. The accord lasts for about 15 years and can be used to finance both existing assets and new loans, CIT said. CIT climbed the most in more than two months, gaining $1.29, or 14 percent, to $10.48.
U.S. futures pared some of the advance after Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, reported a record $2.8 billion second-quarter loss and said it will raise $6 billion in capital in a public offering. Stocks in Europe and Asia dropped as investors speculated bank losses will increase.
Lehman dropped $2.57 to $29.72 for the S&P 500's biggest decline.
Alcoa Inc. climbed $1.28 to $40.50. Barron's said shares in the world's third-largest aluminum producer may climb to $60 if the company becomes a takeover target, citing a Citigroup Inc. analyst.
After Rio Tinto Group bought Canada's Alcan Inc. in July, Alcoa is the ``only sizable independent Western aluminum company left'' for purchase by mining companies such as London-based Xstrata Plc, the weekly newspaper said in its June 9 edition.
Apple Inc. dropped after Barron's said the maker of the iPhone has fallen behind in its production schedule for the new model, forcing it to cut internal shipment forecasts for the year. Apple lost $2.11, or 1.1 percent, to $183.53.
McDonald's, the world's largest restaurant company, gained following its report that sales in the U.S. and Europe improved in May. Wal-Mart Stores Inc., the biggest retailer, rose after Saudi Arabia's Oil Minister Ali al-Naimi said an 8.8 percent surge in crude prices last week was ``unjustified.'' Energy stocks jumped after Goldman Sachs Group Inc. said they are cheap relative to the price of crude.
The Standard & Poor's 500 Index added 7.49, or 0.6 percent, to 1,368.17 as of 10:32 a.m. in New York after the gauge fell the most since Feb. 5 in the last session. The Dow Jones Industrial Average increased 110.89, or 0.9 percent, to 12,320.89. The Nasdaq Composite Index slid 6.71, or 0.3 percent, to 2,467.85. About eight stocks advanced for every five that dropped.
``The consumer isn't falling off a cliff,'' said Nick Sargen, who helps oversee $30 billion as chief investment officer of Fort Washington Investment Advisors in Cincinnati. ``A reversal in oil prices would be a plus.''
The S&P 500 slid 3.1 percent and the Dow lost 395 points in last week's final session following a jump in the unemployment rate and a $10-a-barrel rise in crude oil. The S&P 500 trimmed its rally from a 19-month low in March to 6.9 percent.
Average Rebound
The Dow industrials rose an average of 0.45 percent following its 13 biggest Friday losses since 1991, according to Birinyi Associates Inc. The decline on June 6 was the fifth- steepest in the period, the Westport, Connecticut-based research firm wrote in a note yesterday.
``When you get these steep sell-offs on one day, you typically get some recovery the next,'' Mike Ryan, head of wealth management research for the Americas at UBS Financial Services Inc. in New York, said in an interview with Bloomberg Television. ``We're likely to get some bounce back.''
Crude oil for July delivery declined as much as $3.27, or 2.4 percent, to $135.27 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
The recent gain in prices is being driven by non-fundamental factors, the state-owned Saudi Press Agency reported after a meeting between Al-Naimi and his Pakistani counterpart yesterday.
McDonald's added $2.28, or 4 percent, to $59.23. The maker of the Big Mac hamburger boosted same-store sales in Europe by 9.6 percent and 9.7 percent in Asia, the Middle East and Africa. Same-store sales in the U.S. rose 4.3 percent as McDonald's breakfast menu helped attract customers, the restaurant operator said.
Overseas Sales
Investors should buy U.S. companies with more international sales and sell those with no overseas revenue as higher economic growth abroad creates a disparity in profits between the groups, Goldman Sachs Group Inc. said on June 6.
Wal-Mart rose 76 cents to $59.13. The retailer dropped on June 6 by the most since January. Ford gained 18 cents to $6.22.
Energy stocks climbed 1.9 percent, the most among 10 industries in the S&P 500, after Goldman Sachs Group Inc. recommended investors buy ConocoPhillips, Hess Corp., Chevron Corp. and Suncor Energy Inc. The world's biggest energy companies are cheap relative to the price of oil, Goldman wrote in a report to investors.
``Crude oil supply and demand fundamentals remain bullish,'' analyst Arjun Murti said.
Homebuilders climbed after the number of Americans signing contracts to buy existing homes unexpectedly increased in April. The index of pending home resales added 6.3 percent to 88.2, the highest level in six months, the National Association of Realtors said. Economists projected the index would fall 0 percent, according to the median forecast in a Bloomberg News survey.
D.R. Horton Inc. added 24 cents, or 2.1 percent, to $11.88.
Banks Advance
Financial stocks advanced after CIT Group Inc., the commercial lender trying to escape a cash squeeze, received $3 billion in financing from Goldman Sachs. The accord lasts for about 15 years and can be used to finance both existing assets and new loans, CIT said. CIT climbed the most in more than two months, gaining $1.29, or 14 percent, to $10.48.
U.S. futures pared some of the advance after Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, reported a record $2.8 billion second-quarter loss and said it will raise $6 billion in capital in a public offering. Stocks in Europe and Asia dropped as investors speculated bank losses will increase.
Lehman dropped $2.57 to $29.72 for the S&P 500's biggest decline.
Alcoa Inc. climbed $1.28 to $40.50. Barron's said shares in the world's third-largest aluminum producer may climb to $60 if the company becomes a takeover target, citing a Citigroup Inc. analyst.
After Rio Tinto Group bought Canada's Alcan Inc. in July, Alcoa is the ``only sizable independent Western aluminum company left'' for purchase by mining companies such as London-based Xstrata Plc, the weekly newspaper said in its June 9 edition.
Apple Inc. dropped after Barron's said the maker of the iPhone has fallen behind in its production schedule for the new model, forcing it to cut internal shipment forecasts for the year. Apple lost $2.11, or 1.1 percent, to $183.53.
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