May 14 (Bloomberg) -- U.S. stocks rose, with the Standard & Poor’s 500 Index headed for its eighth record high in the past nine sessions, on increased optimism over growth in the world’s largest economy.
Financial shares climbed the most among 10 S&P 500 industry as hedge-fund manager David Tepper called U.S. banks "a good sector." Bank of America Corp. and Citigroup Inc. rose more than 2.4 percent. Take-Two Interactive Software Inc. rallied 3 percent after the publisher of the "Grand Theft Auto" video games reported profit that beat analyst estimates.
The S&P 500 advanced 0.8 percent to 1,646.34 at 2:20 p.m. in New York. The Dow Jones Industrial Average gained 85.06 points, or 0.6 percent, to 15,176.74. Trading of S&P 500 stocks was in line with the 30-day average at this time of day.
"There’s an encouraging pattern of continued growth in the economic data," Alan Gayle, a senior strategist at RidgeWorth Capital Management, which oversees about $48 billion of assets, said in a phone interview. "What is helping the market is the belief that downside risks to stocks are limited right now."
Confidence among small businesses climbed in April to a six-month high as the outlook for the economy and sales brightened, the National Federation of Independent Business’s optimism index showed today.
Tepper, co-founder and owner of Appaloosa Management LP, said in an interview on CNBC that he is still bullish and the economy is getting better. Tepper, who led Institutional Investor’s ranking of the top earners in hedge funds last year with $2.2 billion, said in January in a Bloomberg Television interview that the U.S. "is on the verge of an explosion of greatness."
Equity futures slumped earlier as JPMorgan Chase & Co. reduced its second-quarter growth forecast for the Chinese economy to 7.8 percent from 8 percent and the full-year estimate to 7.6 percent from 7.8 percent. It cited weak domestic demand suggested by April data, after reports yesterday showed China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates.
Money managers are the most bearish on commodities in more than four years as a majority expected a weaker Chinese economy for the first time in 14 months, a Bank of America survey showed. A net 29 percent of the fund managers surveyed were underweight the asset class in May as their positions "collapsed" to the lowest level since December 2008. One in four now consider a "hard landing" in China as the biggest risk to their investments. The bank surveyed professional investors who together oversee $517 billion.