U.S. Stocks Advance Amid Gains From Home Depot, Energy Shares

U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a three-week high, as Home Depot Inc. (HD) drove consumer companies higher and energy shares rose amid speculation production will increase in the Middle East.

Home Depot rose 2.9 percent, the most in the Dow Jones Industrial Average, as the largest U.S. home-improvement retailer sold $2 billion in bonds to help finance buybacks. Rowan Cos. and Schlumberger Ltd. (SLB) rallied more than 4.4 percent as oil gained 0.8 percent. AK Steel Holding Corp. (AKS) gained 5.2 percent as SAC Capital Advisors LP reported a stake. Apollo Group Inc. (APOL), owner of the biggest U.S. for-profit college, fell 4.3 percent following lower enrollment.

The S&P 500 rose 0.7 percent to 1,319.44 at 4 p.m. in New York. It rebounded after falling to 1,305.26, compared with yesterday’s 50-day average of 1,306.11, a bullish sign to some traders. The Dow gained 81.13 points, or 0.7 percent, to 12,279.01, three days before a U.S. government report forecast to show non-farm payrolls increased by 190,000 in March.

“It’s hard not to want to be a part of this market when there’s clear economic momentum being driven by the jobs market,” said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management, which oversees about $340 billion. “Any other week, these downgrades of Greece and Portugal would knock the market down.”

Four Times

The S&P 500 fell below 1,306.11 -- its 50-day average as of yesterday’s close -- at least four times today, and rebounded within three minutes each time, according to data compiled by Bloomberg. The benchmark measure of U.S. shares closed at a 32- month high of 1,343.01 on Feb. 18.

“There are a lot of technical factors also playing out,” Paulsen said. “You’re bowling through the 50-day moving average and zeroing in on a run at whether we’ll get to that 1,345 level” on the S&P 500, he said.

The S&P 500 fell as much as 0.4 percent earlier after S&P reduced Portugal and Greece’s debt ratings, bolstering speculation Europe’s debt crisis will hamper the global economy. Portugal’s sovereign credit ratings were cut to the lowest investment grade of BBB- and Greece was shifted to BB- at S&P, which said more reductions are possible.

“The market is not surprised by the Portugal and Greece cuts,” said Liam Dalton, president of Axiom Capital Management Inc. in New York, which oversees $1.2 billion. “It’s really more a factor of the market having a sharp move upward and consolidating those gains rather than reacting in a harsh way to the news of Portugal and Spain.”

Home Depot, Energy

Home Depot rose 2.9 percent to $37.70 after it sold $2 billion of 10- and 30-year bonds. The Atlanta-based company will use proceeds to replace $1 billion of 5.2 percent notes issued in 2006 that matured March 1 and to buy its own stock, according to a Securities and Exchange Commission filing.

Energy companies in the S&P advanced 1 percent for the second-biggest gain as a group. Baker Hughes Inc. (BHI) Chief Executive Officer Chad Deaton said Saudi Arabia will deploy more drilling rigs, boosting its count by 28 percent to 118.

Rowan, the U.S. oil and natural-gas driller that also builds rigs, gained 5.2 percent, the biggest increase in the S&P 500, to $43.46. Schlumberger, the world’s largest oilfield contractor, rallied 4.4 percent to $94.36. Baker Hughes, the world’s third-largest oilfield services provider, rose 0.5 percent to $74.16.

Oil, AK Steel

Crude for May delivery gained 81 cents to settle at $104.79 a barrel on the New York Mercantile Exchange. Oil has risen 28 percent in the past year.

AK Steel rallied 5.2 percent to $16.42, the second-biggest gain in the S&P 500. SAC Capital, the hedge fund run by Steven A. Cohen, reported a 4.8 percent stake in the third-largest U.S. steelmaker by sales.

Apollo Group plunged 4.3 percent to $40.55 for the biggest drop in the S&P 500. New student enrollment at the University of Phoenix fell 45 percent, compared with the average analyst estimate that called for a 42 percent drop. An index of 13 for- profit education companies in the U.S. tumbled 1.5 percent.

Amazon climbed 3.1 percent to $174.62. It joined the ranks of music-streaming services today by unveiling Cloud Player, allowing users to buy tracks, store them on the company’s servers and play them on computers and Android smartphones.

Apple gained 0.2 percent to $350.96 and Google rose 1.1 percent to $581.73.

Molycorp

Molycorp Inc. (MCP), the owner of the world’s largest rare-earth deposit outside China, jumped 7.5 percent to $59.65. JPMorgan Chase & Co. (JPM) raised its share-price estimate to $74 a share from $66, saying a recent increase in domestic rare-earth prices in China point to a healthier market than previously thought.

Starwood Hotels & Resorts Worldwide Inc. (HOT), the owner of the St. Regis and W hotel brands, gained 3.9 percent to $57.51 after sliding 5.7 percent yesterday. Chief Executive Officer Frits van Paasschen today said at a JPMorgan Chase & Co. conference in Las Vegas the company is seeing strong travel demand, a day after competitor Marriott International Inc. warned of weakness in North America.

Sprint Nextel Corp. (S) fell 3.4 percent to $4.62 for the third-biggest drop in the S&P. AT&T Inc. (T)’s planned $39 billion takeover of T-Mobile USA “still looks doable,” Stifel Nicolaus & Co. said in a note to clients. Sprint, the third-largest U.S. wireless provider, said this week that the transaction will damage industry competition and called on the government to block it. AT&T, the second-largest U.S. wireless carrier, rose 2.4 percent to $30.05.

Lennar Corp. (LEN), the third-biggest U.S. homebuilder, tumbled 3.4 percent, the second-biggest drop in the S&P 500, to $19.07 after the Miami-based company posted a 13 percent decline in consolidated orders during the first quarter. That missed the average 2 percent increase expected by analysts, according to Deutsche Bank AG, which estimated a 9 percent drop.

“The market is resilient because investors are realizing that stocks are the more compelling game in town after we’ve moved into a more consistent growth phase in the economy,” said Michael Gibbs, the Memphis, Tennessee-based chief equity strategist at Morgan Keegan Inc., which manages $80 billion.