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Market rises as tensions in Ukraine eases

U.S. stocks rose Friday, with the Standard & Poor’s 500 Index climbing the most in five months to erase a weekly loss, as signs that tensions are easing in Ukraine outweighed concern over crises in the Middle East.

Gap Inc. advanced 5.9 percent as the retailer’s earnings and revenue topped estimates. Coach Inc. added 5.4 percent to lead a rally in apparel companies. Zynga Inc. tumbled 1.4 percent after cutting its full-year outlook. News Corp. slid 1.6 percent after fourth-quarter earnings missed estimates as the company struggled in its transition from print to digital.

The S&P 500 jumped 1.2 percent to 1,931.59, the most since March 4. The Dow Jones industrial average climbed 185.66 points, or 1.1 percent, to 16,553.93. About 5.6 billion shares changed hands on U.S. exchanges, 2.6 percent below the three-month average.

“For the most part the market has been pretty resilient over the last week or so,” said Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities. “It has been able to shrug off a lot of negatives and not go lower than it had.”

Stocks jumped after RIA Novosti reported that Russia seeks a de-escalation of the conflict in Ukraine. Equities extended gains as Interfax, citing Russia’s Defense Ministry, said military exercises held since Aug. 4 near the Ukraine border are over and forces are returning to areas of permanent deployment.

The S&P 500 had dropped 3.9 percent from a record on July 24 through yesterday as Russia amassed troops along Ukraine’s border and as conflict escalated between Israel and Hamas. Equity futures retreated early Friday as President Obama approved air strikes in Iraq, and rocket attacks marked the end of a cease-fire between Israel and Hamas.

Then U.S. stocks climbed amid speculation that recent declines had been excessive. Almost 80 percent of stocks in the S&P 500 closed Thursday below their average price of the past 50 days, the most since 2012, according to data compiled by Bloomberg. The S&P 500 has gone without a 10 percent correction since 2011. It trades at 17.5 times the reported earnings of its companies, after reaching a four-year high of 18.3 in June.

All 10 major industries in the S&P 500 advanced. Utilities climbed 2 percent for the largest gain.

Consumer-discretionary shares added 1.6 percent, as Gap rallied 5.9 percent, the most since November. The biggest apparel-focused retailer in the U.S. reported preliminary second-quarter earnings and revenue that beat estimates.

Coach added 5.4 percent to lead a 1.9 percent jump in apparel makers.

Nvidia Corp. gained 8.8 percent after the maker of mobile-phone chips posted second-quarter adjusted earnings of 30 cents a share. Analysts on average had predicted 26 cents.

Monster Beverage Corp. advanced 6.7 percent after reporting quarterly earnings of 81 cents a share. That beat the 75-cent average estimate of analysts in a Bloomberg survey.

Zynga dropped 1.4 percent after the online game company posted second-quarter results at the low end of its forecast and cut its full-year outlook after delaying new games.