U.S. stocks rose in midday trading, a day after the Dow Jones industrial average fell to the lowest since April, amid better-than-forecast earnings and as investors watched developments in crises from Ukraine to Iraq.
Gap Inc. advanced 5.8 percent as the retailer’s earnings and revenue topped estimates. Coach Inc. added 3.8 percent to lead a rally in apparel companies. Zynga Inc. tumbled 7.2 percent after cutting its full-year outlook. News Corp. slid 4.5 percent after fourth-quarter earnings missed estimates as the company struggled in its transition from print to digital.
The Standard & Poor’s 500 Index added 0.4 percent to 1,917.97 at 12:21 p.m. after closing Thursday below its average price for the past 100 days. The Dow rose 75.23 points, or 0.5 percent, to 16,443.50. Trading in S&P 500 companies was 16 percent below the 30-day average for this time of day.
“When you see the geopolitical news in Russia and the Middle East, it’s horrible from a humanitarian point of view for U.S. equities, but how bad is it for U.S. economic fundamentals?” Michael Purves, chief global strategist and head of equity derivatives research at Weeden & Co. in Greenwich, Connecticut, said in a phone interview. “It’s pretty distant. We’ve had a big selloff since the highs in July and in my estimations, this has been a pretty orderly retreat spurred by overstretched market conditions.”
The S&P 500 has dropped 3.5 percent from a record on July 24 as Russia amassed troops along Ukraine’s border and as conflict escalated between Israel and Hamas. The index fell 0.6 percent yesterday, closing below its 100-day moving average for the first time since April. The Dow has bounced back after touching its average price in the past 200 days on Thursday.
The S&P 500 has gone without a 10 percent correction since 2011. It trades at 17.3 times the reported earnings of its companies, falling from a four-year high of 18.3 in June.
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