By Julie Cruz and Elizabeth Stanton March 10 (Bloomberg) — U.S. stocks rose for a second day as an unexpected drop in wholesale inventories and improvement in the corporate bond market spurred optimism the global economic recovery will strengthen. Citigroup Inc. advanced 4.7 percent as the bank sold trust preferred securities to raise capital. American International Group Inc. rose 10 percent in the wake of two successful asset sales. Facet Biotech Corp. jumped 66 percent after Abbott Laboratories agreed to take it over. Navistar International Corp. fell 4.4 percent after the truck-maker’s first-quarter sales missed analyst estimates. The Standard & Poor’s 500 Index rose for the eighth time in nine days, adding 0.6 percent to 1,147.11 as of 10:55 a.m. in New York. The Dow Jones Industrial Average advanced 25.55 points, or 0.2 percent, to 10,589.93. “The big question is — where do we go from here?” said Peter Jankovskis , who helps manage about $1.8 billion as co- chief investment officer at Oakbrook Investments in Lisle, Illinois. “We’ve had a very strong rally off the lows. There are certainly expectations that things are getting better. The financial system has stabilized. Yet we haven’t seen enough to say that is sustainable. People are waiting for more evidence to go one way or the other.” U.S. stocks rose yesterday on the anniversary of the 2009 bear-market low for the S&P 500 amid speculation the economy will continue to recover from the worst contraction since the Great Depression. The S&P 500 has rallied almost 70 percent from a 12-year low last March as the Federal Reserve kept its benchmark interest rate near zero to stimulate economic growth. Emergency Measures The main benchmark for U.S. stocks has recovered losses after sliding as much as 8.1 percent from this year’s high amid concern that some European countries will fail to pay back debt and speculation the Federal Reserve will need to rein in emergency stimulus measures as the economy improves. China’s exports jumped more than forecast in February and property prices rose at the fastest pace in 23 months, adding to pressure on policy makers to pare back stimulus measures adopted during the global recession. Greek Prime Minister George Papandreou said after a meeting at the White House yesterday that U.S. President Barack Obama expressed support for measures being taken to deal with the financial crisis. The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, former European Commission President Romano Prodi said. Still, the Bloomberg Professional Global Confidence Index fell to 53.8 from 54.9 in February. Sentiment declined in Europe, suggesting policy makers may need to rein in fiscal stimulus efforts before evidence emerges of sustained recoveries in some economies. The index exceeded 50 for an eighth month, which means there were more optimists than pessimists. AIG, Citigroup AIG rallied for a fifth straight day, its longest streak since August. The shares gained 10 percent to $36.07 and have jumped 45 percent since March 3 on speculation the company will be able to repay a government bailout and meet other debt obligations. The insurer reaped at least $3.2 billion for bondholders after announcing deals to sell its two largest non- U.S. life insurance divisions for $51 billion. Citigroup climbed 4.7 percent to $4, extending yesterday’s 7.3 percent advance. Its 30-year fixed-to-floating rate securities may initially yield about 8.875 percent, according to a person familiar with the offering. Citigroup, seeking to bolster capital after repaying bailout funds to the Treasury, plans to issue as much as $2 billion of the securities as soon as today, another person said. Navistar, American Eagle Navistar International Corp. fell 4.4 percent to $42.32. Its first-quarter sales of $2.8 billion were 13 percent lower than the average of 10 analyst estimates in a Bloomberg survey. American Eagle Outfitters Inc. gained 6 percent to $18.18. The U.S. clothing retailer said it plans to close its Martin+Osa concept, including all 28 stores and the online business. It also estimated first-quarter earnings per share excluding some items of 15 cents to 17 cents. Analysts in a Bloomberg survey had estimated it at 15 cents. Bucyrus International Inc. advanced 2.2 percent to $67.04. The maker of mining equipment was added to Goldman Sachs Group Inc.’s “conviction buy” list. InterMune Inc. soared 66 percent to $38.75. The maker of a treatment for a deadly lung disease that afflicts about 100,000 Americans won a U.S. panel’s backing to introduce the medicine. The Food and Drug Administration usually follows the recommendations of its advisory panels. Facet Biotech jumped 66 percent to $26.97. Abbott Laboratories, maker of the arthritis drug Humira, agreed to buy the company for $27 a share, adding experimental medicines in cancer and immunology. Both boards have approved the accord, which is expected to close in the second quarter, the companies said in a statement. Allergan Inc. rose 1.8 percent to $62.45. The health-care company’s Botox for reducing facial wrinkles was approved by U.S. regulators to treat muscle spasms in the elbow, wrist and fingers, the Food and Drug Administration said. To contact the reporters on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net ; Elizabeth Stanton in New York at estanton@bloomberg.net
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