April 13 (Bloomberg) -- Most U.S. stocks rose, erasing an early slide, as speculation bank profits rebounded in the first quarter offset predictions of disappointing earnings from Boeing Co. and Chevron Corp.
Citigroup Inc. jumped 25 percent and Bank of America Corp. rose more than 15 percent. Goldman Sachs Group Inc. climbed 4.7 percent after Citigroup analysts urged investors to buy shares of the sixth-biggest U.S. bank. Express Scripts Inc. jumped 16 percent on plans to buy WellPoint Inc.’s pharmacy-benefit management unit for $4.7 billion,
About 10 stocks advanced for every nine that fell on the New York Stock Exchange. The Standard & Poor’s 500 Index added 0.3 percent to 858.71 after tumbling as much as 1.3 percent. The Dow Jones Industrial Average lost 26.05 points, or 0.3 percent, to 8,057.33 as declines in Boeing, Chevron and Exxon Mobil Corp. weighed on the 30-stock gauge. Markets in Europe were closed, while the MSCI Asia Pacific Index climbed 0.5 percent.
“Now is absolutely not the time to give up on stocks,” said David Katz, who oversees $1 billion as chief investment officer of New York-based Matrix Asset Advisors, in a Bloomberg Radio interview. “You’re going to get better-than-average returns over the next 3, 5 and 10 years and typically you’ll get most of those returns in the early part of the recovery.”
Earnings Watch
Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and General Electric Co. are among more than 30 S&P 500 companies scheduled to announce results this week. Profits probably fell for a seventh-straight quarter in the January-to- March period, the longest stretch of declines since at least the Great Depression.
A measure of S&P 500 financial stocks rose 4.8 percent, the most among 10 industries. Huntington Bancshares Inc. rallied 33 percent to $2.86 and Fifth Third Bancorp jumped 21 percent to $4.34.
Financial stocks are the most heavily shorted industry with about 5 billion New York Stock Exchange shares borrowed and sold by traders betting on further declines, Bloomberg data shows. That’s almost twice the level of the next highest group, so- called consumer discretionary companies, which has approximately 2.7 billion shares sold short.
The six largest U.S. banks by assets are set to report their latest quarterly figures over the next two weeks. Citigroup, Bank of America and JPMorgan said last month they made money at the start of 2009, while Wells Fargo & Co. posted higher-than-estimated earnings last week.
‘Risk of Being Short’
“It hardly seems like a time you want to be short banks, Citi in particular,” said Andy Baker, an equity strategist at Jefferies Group Inc. in New York. “They report this week and Wells Fargo had those good numbers last week so it could be time for an upside surprise. That’s the risk of being short.”
Goldman Sachs climbed 5 percent to $130.60. The sixth- biggest U.S. bank was rated “buy” in new research coverage by Citigroup analysts, who said the company will likely come out of the government’s stress test in “good shape.” $4.7 billion.
Express Scripts rallied 16 percent to $56.81 for the biggest advance since October. The deal, which will add about 25 million members, may “slightly” boost earnings this year, the company said. WellPoint climbed 8.4 percent to $43.75.
To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net.
