Stocks' Advance Is Biggest in 3 Months

Stocks last week rose the most in almost three months after oil prices reached new highs and Google, J.P. Morgan Chase and Intel reported better-than-expected earnings.

Energy stocks in the Standard & Poor's 500-stock index had the biggest weekly gain this decade after the price of crude oil surpassed $116 a barrel. Google's profit report sent the company's shares up 20 percent Friday, the biggest one-day advance since it went public in August 2004. Intel helped push technology companies to the steepest weekly advance in 20 months, while J.P. Morgan's chief executive, Jamie Dimon, said the credit-market crisis is nearing an end.

"It's been quite an exciting market," said John Carey of Pioneer Investment Management in Boston. "Earnings are the big story, and you have some companies surprising and being rewarded in the market."

The S&P 500 added 4.3 percent last week, to 1390.33, the highest level since Feb. 1. The Dow Jones industrial average rallied 4.3 percent, to 12,849.36, and the Nasdaq composite index rose 4.9 percent, to 2402.97.

Profits exceeded analysts' estimates at 58 of 101 companies in the S&P 500 that have released first-quarter results, even as earnings fell an average 37 percent from a year earlier, according to Bloomberg data. Overall, earnings are forecast to decline 13.7 percent in the first quarter, marking the third consecutive decrease.

Intel, the largest semiconductor manufacturer, rose 6.2 percent this week, while J.P. Morgan, the third-biggest U.S. bank, added 7.6 percent. Caterpillar, Charles Schwab and Wells Fargo also advanced after their quarterly reports.

Oil, copper, corn and rice reached all-time highs this week because of concern that producers won't be able to keep up with growing demand. The gains sent shares of energy and raw-material producers in the S&P 500 up 7.7 percent and 5.6 percent, respectively, this week. The two industries are the only ones among 10 in the S&P 500 to advance this year.

Yields on Treasury securities climbed as gains in equities cut demand for fixed-rate investments. The two-year note's yield climbed to 2.13 percent from 1.75 percent, its biggest weekly increase since 2001.

The Treasury will auction $20 billion of three-month bills and $20 billion of six-month bills on Monday. They yielded 1.40 percent and 1.63 percent, respectively, in when-issued trading. One-month bills will be sold Tuesday.

-- Bloomberg News