U.S. Stocks Rebound After Two-Day Slump; H-P, AIG Rally
02/22/2013| 10:11am US/Eastern
--U.S. stocks gain after two-day drop
--German business confidence tops expectations
--H-P, AIG rally after reporting quarterly results
By Matt Jarzemsky and Tomi Kilgore
U.S. stocks bounced back from their biggest two-day slump of the year as investors cheered strong data out of Germany and Hewlett-Packard's better-than-expected quarterly report.
The Dow Jones Industrial Average advanced 39 points, or 0.3%, to 139920 in the minutes after the opening bell, following a 155-point tumble the past two days.
The Standard & Poor's 500-stock index tacked on five points, or 0.3%, to 1507. The Nasdaq Composite Index rose 10 points, or 0.3%, to 3141.
"Any selloff we get is going to be shallow," said Scott Wren, senior equity strategist at Wells Fargo Advisors, which manages $1.2 trillion in St. Louis. "The mentality is, 'I want to wait for the market to pull back so I can buy stocks at lower levels.' The Fed's on our side, companies are making money and the growth environment is ok."
Hewlett-Packard rallied 7.4%, leading the Dow, after the technology company reported a quarterly profit that topped analysts' expectations and it gave a better-than-expected earnings forecast.
Financial shares in the S&P 500 led gains across nine of the index's 10 sectors as American International Group advanced 4.3%. The insurer reported a surprise operating profit.
European markets were broadly higher, with the Stoxx Europe 600 up 1.1% to recover most of the sharp losses suffered in the previous session, after data showed German business confidence increased much more than expected in February. That helped to offset a prediction by the European Union's official economists that the euro-zone economy will contract in 2013 for the second-straight year.
The Ifo Institute's business confidence index rose to 107.4, the biggest monthly gain since July 2010, from January's 104.3 and above economist estimates of 104.7. Germany's DAX index climbed 0.8%.
Elsewhere, Italy's FTSE MIB index advanced 1.5%. The index had fallen sharply this week to close Thursday at two-month low ahead of general elections in Italy this weekend, with investors fearing a new government may not continue the country's reformist path.
Asian markets were mixed, with China's Shanghai Composite falling 0.5% to a one-month low and Hong Kong's Hang Seng shedding 0.5% to a two-month low. Investors are concerned that policy makers will implement additional tightening measures to control residential-property prices. Meanwhile, Japan's Nikkei Stock Average gained 0.7% and Australia's S&P ASX 200 added 0.8% after suffering sharp losses on Thursday.
April crude-oil futures slid 0.2% to $92.69 a barrel, while February gold futures retreated 0.3% to $1,574.40 an ounce. The dollar edged slightly higher against both the euro and the yen.
In other corporate news, Cabot Oil & Gas surged 8.3%, the biggest climb in the S&P 500, after the energy company's earnings jumped 55% on higher natural-gas and oil production.
Texas Instruments gained 3.2% after disclosing a 33% increase in its quarterly dividend and increasing its stock-repurchase authorization by $5 billion.
Abercrombie & Fitch slipped 3.9% after giving a fiscal-2013 earnings outlook that was below estimates.
Vivus dropped 4.8% after the pharmaceutical company said a European Medicines Agency committee backed an earlier decision, in which the committee recommended against approval of a Vivus weight-loss drug.
WebMD Health surged 26% after the health-information provider's adjusted fourth-quarter earnings and revenue beat analyst estimates and its 2013 earnings outlook topped forecasts.
Write to Tomi Kilgore at firstname.lastname@example.org and Matt Jarzemsky at email@example.com.