U.S. Stocks Advance; Circuit City, Target, Boeing Lead Gains

By Eric Martin


Nov. 23 (Bloomberg) -- U.S. stocks rose the most in seven days, paring the week's loss, as shoppers packed stores on the first day of the holiday shopping season and investors speculated a weak dollar will make exports more competitive.

Circuit City Stores Inc., Target Corp. and Macy's Inc. led a gauge of retailers to its biggest Black Friday rally since at least 1989. Boeing Co., the world's second-largest commercial airplane maker, led an advance by exporters as the dollar traded near a record low against the euro. Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. rose for the first time this week after financial shares fell to a two-year low on Nov. 21.

The Standard & Poor's 500 Index added 23.93, or 1.7 percent, to 1,440.7, reducing the week's loss to 1.2 percent. The Dow Jones Industrial Average increased 181.84, or 1.4 percent, to 12,980.88, down 1.5 percent for the week. The Nasdaq Composite Index rose 34.45, or 1.3 percent, to 2,596.6, cutting its weekly drop to 1.5 percent. About seven stocks gained for every one that fell on the New York Stock Exchange. Some 670 million shares changed hands on the Big Board by the 1 p.m. close, the busiest day after Thanksgiving since 1999.

``The fact that Black Friday is not a disaster and is off to a modest but healthy start is just a relief,'' said Mark Bronzo, who helps manage $500 million at Nationwide Separate Accounts in Irvington, New York. ``The scenario we've all been operating under for the last several months is that the retail world is coming to an end. That's not the case.''

Yearly Gain

Today's rally pushed the S&P 500 to a 1.6 percent advance for the year after a drop on Nov. 21 wiped out the benchmark's 2007 gain. Retailers in the index have fallen 17 percent as a group this year on concern that rising energy prices and slumping home values will depress spending.

Retail shares in the S&P 500 advanced 2.7 percent today with 28 of 30 companies gaining. The day after Thanksgiving is known as Black Friday because it is considered the start of the holiday shopping season, when retailers earn most of their profits.

Circuit City, the second-biggest U.S. consumer electronics chain, rallied $1.06, or 19 percent, to $6.51. Macy's Inc., the owner of its namesake chain and Bloomingdale's, climbed $1.53 to $30.03. Target, the second-biggest U.S. discounter, added $3.07 to $57.17. Sears Holdings Corp., the largest U.S. department- store chain, rose $2.26 to $112.58. J.C. Penney Co., the third biggest, increased $1.23 to $41.30.

``It seems like there's a lot of traffic in the stores, so that's a positive,'' said Michael Nasto, senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``People might be thinking the sell-off we had the last few days was overdone.''

Exporters, Banks Gain

Boeing, whose top rival is Europe's Airbus SAS, gained $2.13 to $89.54. General Electric Co. added 50 cents to $37.67. Europe accounted for about one quarter of the company's net sales last year. International Business Machines Corp. rose $1.83 to $104.05. The world's second-biggest software maker generated more than half of its revenue outside of the Americas in 2006.

Citigroup, the biggest U.S. bank, added 97 cents, or 3.2 percent, to $31.70. Citigroup, Bank of America Corp. and JPMorgan Chase & Co. are ready to move forward with a plan to revive credit markets with a so-called superfund to buy assets from structured investment vehicles, the Wall Street Journal reported. The three biggest U.S. banks are likely to start asking others to sign up to specific financial terms next week, the Journal reported, citing people familiar with the matter.

Bank of America, the second-largest U.S. bank, gained $1.01 to $43.15. JPMorgan, the third-biggest, climbed $1.27 to $41.95. Wells Fargo & Co., the second-largest U.S. mortgage lender, added 92 cents to $30.84.

Super SIV

The plan is to create a fund amounting to $75 billion to $100 billion as a potential buyer of assets from structured investment vehicles, off-balance-sheet entities that have gotten into difficulties because of lack of liquidity in credit markets. So far, other banks have expressed informal interest, the newspaper said.

The S&P 500 Financials Index, which dropped to the lowest since 2005 on Nov. 21, rose for the first time in seven days today, adding 3.1 percent.

``The banks are coming around,'' said Andrew Seibert, who helps manage $400 million at Nextier Wealth Management in Pittsburgh. ``People that are buying them are saying `There's value here and these stocks are reasonably priced at this range. I'm going to dip my foot in the water.'''

Apple, E*Trade,

E*Trade Financial Corp. gained $1.07, or 25 percent, to $5.33. The second-worst-performing stock in the S&P 500 this year rose on a CNBC report the online brokerage is in talks to sell itself or part of its business. Pam Erickson, an E*Trade spokeswoman, declined to comment.

MBIA Inc. and Ambac Financial Group Inc., the world's two biggest bond insurers, jumped after the bailout of rival CIFG Guaranty signaled the industry may get the financing it needs to avoid credit-rating downgrades. MBIA gained $1.96 to $34.14. Ambac rose $1.41 to $25.55.

Apple Inc. gained $3.08 to $171.54. The maker of the iPod music player agreed to pay $10 million to settle a patent- infringement lawsuit by Burst.com Inc. over technology that stores audio and video files. The settlement, which isn't yet final, provides Apple with a license to Burst.com's patents, plus a pledge that Burst won't sue Apple again over future patents, Burst said.

GM, Ford Rise

Carmakers advanced on a report that Congress may adopt separate fuel-efficiency standards for cars and sport-utility vehicles in order to help pass an energy bill this year.

General Motors Corp., the largest U.S. automaker, rose 77 cents to $27.16. Ford Motor Co., the second biggest, climbed 24 cents to $7.19.

Democratic leaders have intensified talks with Republicans in an effort to find compromise legislation and a senior administration official said the odds that a law will be adopted have improved significantly, the Wall Street Journal reported. Rising oil prices have increased pressure on lawmakers to speed up energy-saving legislation, the Journal reported.

Freeport-McMoRan Copper & Gold Inc., the world's second- largest producer of copper, advanced $3.10 to $93.16.

Copper rose the most in a week after inventories plunged in China, the world's biggest user of the metal.

Slumping Dollar

The dollar dropped as low as $1.4967 per euro, the weakest since the single European currency's debut in 1999, on speculation deepening U.S. credit-market losses will prompt the Federal Reserve to cut interest rates.

Former Federal Reserve Chairman Alan Greenspan said policy makers may need to address the weakness of the dollar if it threatens to stoke inflation.

The decline in the subprime mortgage market ``is over'' because the market ``went to zero and cannot go any further,'' Greenspan said at a conference in Oslo, Norway, today. He added that the ``conventional'' mortgage market is ``doing reasonably well.''

The Russell 2000 Index, a benchmark for companies with a median market value of $592 million, added 2 percent to 755.03. The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, gained 1.6 percent to 14,518.19. Based on its advance, the value of stocks increased by $287 billion.

Apple Inc. (AAPL US)
Bank of America Corp. (BAC US)
Circuit City Stores Inc. (CC US)
Citigroup Inc. (C US)
E*Trade Financial Corp. (ETFC US)
Ford Motor Co. (F US)
Freeport-McMoRan Copper & Gold Inc. (FCX US)
General Electric Co. (GE US)
General Motors Corp. (GM US)
J.C. Penney Co. (JCP US)
JPMorgan Chase & Co. (JPM US)
Target Corp. (TGT US)
Wal-Mart Stores Inc. (WMT US)
Wells Fargo & Co. (WFC US)