U.S. stocks climbed early today, with the Standard & Poor’s 500 Index rebounding from the biggest weekly loss in two years, as Portugal announced a bailout for Banco Espirito Santo SA and Berkshire Hathaway Inc. beat earnings estimates.
Berkshire Hathaway rose 1.3 percent as results improved at operating businesses including auto insurer Geico, railroad BNSF and the energy unit. Amgen Inc. climbed 1.1 percent after a clinical trial met its primary endpoint.
The S&P 500 advanced 0.3 percent to 1,930.48 at 10:06 a.m. in New York. The Dow Jones industrial average rose 24.56 points, or 0.2 percent, to 16,517.93. The Nasdaq Composite Index climbed 0.5 percent. Trading in S&P 500 companies was 8.8 percent below the 30-day average for this time of day.
“We’re seeing a reprieve of geopolitical concerns, which is modestly emboldening risk-taking for today,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion, said in a phone interview. “The economy overall is moving forward with better-than-expected earnings, and we see an upward bias continuing over the next couple of months.”
The S&P 500 tumbled 2.7 percent last week, the most since June 2012, as companies around the globe including Exxon Mobil Corp. posted disappointing results, Argentina defaulted and Banco Espirito Santo was ordered to raise capital. The Chicago Board Options Exchange Volatility Index, which usually moves in the opposite direction to the S&P 500, jumped 34 percent to 17.03 last week.
About $1.2 trillion was wiped from the value of global equities last week amid concern that the crisis at Espirito Santo and the default by Argentina would constrict credit markets as the Federal Reserve debates the timeline for interest-rate increases.
Concern has grown that the improving economy may force the Fed to raise interest rates sooner than expected. Data last week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. A separate report on Aug. 1 showed employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997.
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