Thursday, April 30, 2009

U.S. Stocks Erase Gain on Exxon’s Lower-Than-Estimated Profit

U.S. stocks pared their gain, almost erasing the 1.7 percent surge in the Standard & Poor’s 500 Index, as Exxon Mobil Corp. drove energy companies lower and the government pushed Chrysler LLC into bankruptcy.

Exxon and Chevron Corp. lost more than 3 percent, the steepest drops in the Dow Jones Industrial Average, after the former missed analysts’ profit estimates by the most in three quarters. Caterpillar Inc., Walt Disney Co. and General Motors Corp. rallied, helping to prop up benchmark indexes.

The S&P 500 rose 0.2 percent to 875.05 at 12:56 p.m. in New York after losing almost 14 points since 11:16 a.m. The Dow average added 2.38, or less than 0.1 percent, to 8,188.11. Shares in Europe and Asia climbed.

“An event like Chrysler going into bankruptcy reminds people that there’s still a lot of stuff out there that needs to be figured out,” said Sarah Hunt, a fund manager for Purchase, New York-based Alpine Mutual Funds, which oversees about $5 billion. “It’s tempers enthusiasm.”

Global equities advanced as companies from Visa Inc. to Dow Chemical Co. and BASF SE posted earnings that beat analysts’ estimates and Honda Motor Co. forecast an annual profit. Industrial output in Japan increased for the first time in six months. U.K. consumer confidence climbed to a one-year high.

“All the things are in place for the bear market to have ended,” Anthony Bolton, president of investments at Fidelity International, said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”

Fidelity International is the London-based affiliate of Fidelity Investments, the world’s largest mutual-fund company. Bolton’s Special Situations Fund beat the FTSE All-Share Index on an annual basis by 6 percentage points from 1979 through 2007, according to Fidelity.