US stocks rose, with the Standard & Poor’s 500 Index erasing a loss for 2014 to close at a record, as the World Bank lifted its global growth forecast and Bank of America Corp.’s profit spurred a rally in financial shares.
The S&P 500 added 0.5% to 1,848.38 at 4 p.m. in New York, surpassing its previous record of 1,848.36 from December 31. The Dow Jones Industrial Average gained 108.08 points, or 0.7%, to 16,481.94. About 6.8 billion shares changed hands on U.S. exchanges, 12% above the 30-day average.
The World Bank raised its global growth forecasts as a recovery in advanced economies tempers the effects of tighter monetary conditions on developing markets. The forecast for the richest nations was raised to 2.2% from 2%. Part of the increase reflects improvement in the 18-country euro area, with the US ahead of developed peers, growing twice as fast as Japan.
“It’s a true, cyclical, macro upswing that’s broad-based,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, said in a phone interview for Bloomberg. His firm manages $1.1 billion. “People who have reported have posted really solid numbers, specifically yesterday’s JPMorgan and today with BofA. Just tells us that when the banks are doing well, the economy is going well.”
Data on Wednesday indicated that manufacturing in New York, northern New Jersey and southern Connecticut grew at a faster pace this month. The Federal Reserve Bank of New York’s general economic index surged to 12.5, topping the 3.5 estimate in a Bloomberg survey. Positive readings mean that activity expanded.
In corporate news, technology shares were among the biggest gainers.
Apple advanced 2% after Chief Executive Tim Cook said the companys recent agreement with China Mobile helped drive record iPhone sales in China during the first quarter.
Data-storage companies rallied after Datalink Corp.’s quarterly earnings and sales surpassed its expectations. Datalink surged 38% to $14.96, the highest since August 2000. NetApp Inc. jumped 8.3% to $43.51 for the best performance in the S&P 500 and Teradata Corp. climbed 4% to $47.63.
Bank of America climbed 2.3% to $17.15, the highest since May 2010. The lender’s profit more than quadrupled as the company quelled claims tied to defective mortgages.
Tesla Motors Inc. advanced 1.8% to $164.13, the highest since November. Elon Musk predicted that the company will deliver its first Model S vehicles to China in March. The electric-car maker surged 16% yesterday after saying it delivered 6,900 Model S cars in the fourth quarter, pushing its full-year sales beyond a company target.
General Motors Co. declined 1.6% to $39.38. The carmaker forecast 2014 profit to “modestly” improve as it introduces 15 new or refreshed vehicles in the US. The company yesterday announced a dividend of 30 cents a share, the first payout since 2008.
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