August 16th, 2012

S&P 500 Futures – U.S. stocks advanced, sending the Standard & Poor’s 500 Index toward the highest level since April, as building permits jumped in July to a four-year peak.

Cisco Systems Inc. rallied 8 percent on better-than- expected earnings while Sears Holdings Corp. climbed 5.6 percent as its loss narrowed. Facebook Inc. dropped 6.6 percent as 271.1 million of its shares will be allowed to trade. Wal-Mart Stores Inc. fell 3.5 percent after posting second-quarter sales that trailed analysts’ estimates.

The S&P 500 rose 0.3 percent to 1,409.34 at 10:46 a.m. in New York. The Dow Jones Industrial Average added 34.07 points, or 0.3 percent, to 13,198.85. Trading in S&P 500 companies was almost in line with the 30-day average at this time of day.

(Related:Facebook Freeing 60% More Shares Seen Weighing On Stock)

“We’re in a situation where the economy is growing, jobs are being created, and the consumer seems to be feeling better about spending,” Jason Benowitz, who helps manage $5 billion at Roosevelt Investment Group Inc. in New York, said in a phone interview. “The fact permitting is improving in the housing market suggests the future is going to be there. On the other hand, you have to counterweight the less likely chance of further monetary easing.”

New-home construction in the U.S. fell 1.1 percent to a 746,000 annual rate from June’s 754,000 pace, Commerce Department figures showed today in Washington. The median estimate of 79 economists surveyed by Bloomberg News called for 756,000. Building permits, a proxy for future construction, rose to an 812,000 pace, the most since August 2008.

S&P 500: Jobless Claims

Jobless claims climbed by 2,000 to 366,000 in the week ended Aug. 11, Labor Department figures showed. The median forecast of 45 economists surveyed by Bloomberg News called for an increase to 365,000. The four-week moving average, a less volatile measure, dropped to 363,750, the fewest since the week ended March 31.

The Fed Bank of Philadelphia’s general economic index increased to minus 7.1 in August from minus 12.9 the previous month. Economists forecast the gauge would improve to minus 5, according to the median estimate in a Bloomberg survey. A reading of zero is the dividing point between contraction and expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

The S&P 500 added 0.1 percent yesterday as investors weighed manufacturing data for clues on whether the Federal Reserve will move to stimulate the economy. The index has fluctuated around 1,400 for the past seven trading sessions, with intraday price movement averaging 0.6 percent, the smallest fluctuation over a comparable period since January 2011, according to data compiled by Bloomberg.

S&P 500: Vacationing Traders

Trading volume and volatility have dropped as vacationing traders awaited policy clues from the Fed’s summit at the end of the month and the European Central Bank meeting in September. The index has rallied 10 percent from a five-month low on June 1 amid speculation global central banks will introduce further stimulus measures.

Cisco gained 8 percent to $18.75. The biggest maker of computer-networking equipment reported quarterly profit and sales that topped analysts’ estimates as job cuts kept costs in check and price reductions attracted customers.

Profit excluding some costs was 47 cents a share in the period ended July 28, Cisco said. That compared with the average estimate of 46 cents, according to data compiled by Bloomberg. Revenue rose 4.4 percent to $11.7 billion, compared with analysts’ prediction for $11.6 billion.

Sears added 5.6 percent to $59.77. The retailer controlled by hedge fund manager Edward Lampert reported a smaller second- quarter loss, helped by reduced inventory costs.

Electronic Arts

Electronic Arts Inc. surged 9.2 percent to $14.29. The second-largest U.S. video-game maker is exploring a sale of the company and has been approached by private equity firms such as KKR & Co. and Providence Equity Partners Inc., the New York Post reported, citing people familiar with the situation.

Facebook sank 6.6 percent to $19.80, the lowest level since its initial public offering. The world’s largest social network frees up 271.1 million of its shares today, boosting by 60 percent the number that could be traded and adding to concerns that have weighed on the stock since the company’s IPO.

Early Facebook investors such as DST Global Ltd., Goldman Sachs Group Inc., Elevation Partners and Accel Partners get a green light today to start selling part of their holdings, Menlo Park, California-based Facebook has said in filings.

Wal-Mart Slumps

Wal-Mart fell 3.5 percent to $71.88. The world’s largest retailer reported a 4.5 percent increase in total second-quarter revenue. to $114.3 billion. That trailed analysts’ $115.8 billion average estimate. Net income rose to $4.02 billion, or $1.18 a share, from $3.8 billion, or $1.09, a year earlier. The average of 26 analysts’ estimates compiled by Bloomberg was $1.17 a share.

Agilent Technologies Inc. tumbled 7.2 percent to $37.55. The maker of scientific-testing equipment cut its full-year forecasts, citing slowing economic growth and delays in order deliveries from customers. Profit for the current fiscal year will be no more than $3.08 a share, Agilent said. Analysts, on average, estimated $3.23.

- Lu Wang in New York at Bloomberg.