US stocks rose this week, driving the Standard & Poor’s 500 Index to its longest winning streak since February, amid optimism that Europe’s leaders will announce a plan to contain the debt crisis and after McDonald’s Corp joined companies beating profit estimates.
Financial shares in the S&P 500 added 3.9 percent as European finance ministers began negotiations to prevent a Greek default and shield banks. McDonald’s rose 2.7 percent, while Bank of America Corp and Goldman Sachs Group Inc climbed more than 4.3 percent after their quarterly reports. PulteGroup Inc jumped 11 percent as data showed sentiment among homebuilders improved more than forecast. El Paso Corp soared 28 percent after Kinder Morgan Inc agreed to buy it.
The S&P 500 climbed 1.1 percent to 1,238.25, the highest since Aug. 3, and has risen three straight weeks. It has surged 13 percent since Oct. 3, when it closed within 1 percent of a bear market, or 20 percent plunge, from its high in April. The Dow Jones Industrial Average rose a fourth straight week, gaining 164.30 points, or 1.4 percent, to 11,808.79.
“We’ve had a combination of good economic news, better news out of Europe and third-quarter corporate earnings are coming along pretty well,” Philip Orlando, the New York-based chief equity market strategist at Federated Investors Inc, said in a telephone interview. His firm oversees about US$355 billion.
Equities rose on Friday as European finance ministers approved a 5.8 billion euro (US$8.05 billion) loan to Greece, and France retreated in a clash with Germany over expanding the bailout fund. Talks continue through Wednesday.
The S&P 500 also gained after 74 percent of companies that reported quarterly results topped the average analyst projection.
Financial stocks rallied the most out of 10 groups in the S&P 500 this week following gains in European lenders. Bank of America, which has dropped 52 percent this year for the worst performance in the Dow, jumped 4.4 percent to US$6.46.
Profit for S&P 500 companies climbed 16 percent in the third quarter and will rise 18 percent to a record US$99.25 for all of this year, analyst estimates compiled by Bloomberg show.
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