Stocks rallied Tuesday, giving the Standard & Poor’s 500 index its biggest gain in a month, as industrial production rose more than forecast and corporate earnings topped estimates.
Citigroup Inc. added 1.6 percent after Chief Executive Officer Vikram Pandit stepped down. Johnson & Johnson climbed 1.4 percent after raising its 2012 forecast. Murphy Oil Corp. rallied 8 percent after saying it plans to spin off its U.S. refined fuels business. International Business Machines Corp. and Intel Corp. tumbled more than 2.4 percent after the market closed as the companies reported third-quarter results.
The S&P 500 climbed 1 percent to 1,454.92. The index advanced 1.8 percent over two days. The Dow Jones industrial average added 127.55 points, or 1 percent, to 13,551.78.
“Investors are cycling back into risk as earnings as well as economic numbers in the U.S. are somewhat better than expected,” said Chad Morganlander, a fund manager at Stifel Nicolaus & Co. “Economic growth will continue to be sluggish even with the flickers of hope that we’ve seen this morning.”
The S&P 500 has rallied 16 percent this year and is about 7 percent below its all-time high of 1,565.15 reached in October 2007. More than 80 companies in the S&P 500 have scheduled their results this week, according to data compiled by Bloomberg News. Of the 50 companies in the benchmark index that have reported since Oct. 9, 37 posted earnings that exceeded analyst estimates, the data showed.
Output at factories, mines and utilities rose 0.4 percent in September after a 1.4 percent decline in August that was the biggest since March 2009, the Federal Reserve reported. The median estimate in a Bloomberg survey of 85 economists called for production to rise 0.2 percent. Manufacturing, which makes up 75 percent of the total, climbed 0.2 percent.
American equities followed European stocks higher as two German lawmakers said the country is open to Spain seeking a precautionary credit line. Michael Meister and Norbert Barthle, officials within Chancellor Angela Merkel’s Christian Democratic bloc, indicated a rolling back of German resistance to a full sovereign bailout for Spain.
“We have more good news than bad and no reason to take the market down in the short term,” said James Gaul, a portfolio manager at Boston Advisors LLC.
Nine out of 10 groups in the benchmark index rose, with commodity producers and technology shares rallying at least 1.5 percent. The Morgan Stanley Cyclical Index jumped 1.8 percent, the most since Sept. 6, as investors bought shares of companies most tied to economic growth. Financial shares added 0.7 percent as a group.
Apple Inc. jumped 2.4 percent to $649.79. The world’s most valuable company sent out invitations for what it’s calling a “special event” on Tuesday in San Jose, Calif. Apple plans to unveil a smaller version of its iPad tablet at the event, a person with knowledge of the matter said earlier this month.