Record Advance in S&P 500 Futures Shows Confidence in Economy:

Record Advance in S&P 500 Futures Shows Confidence in Economy:

By Lynn Thomasson and Rita Nazareth

March 13 (Bloomberg) -- The longest-ever gain in futures linked to the Standard & Poor’s 500 Index shows growing investor confidence in the U.S. economy.

“It’s a bullish indication,” said Stephen Lieber, chief investment officer of Alpine Woods Capital Investors LLC, which manages more than $7 billion in Purchase, New York. “There’s greater confidence in the equity market. Earnings have been relatively positive.”

Contracts to buy the S&P 500 in June 2010 have climbed for 11 days since Feb. 25, rallying 4.5 percent to 1,146.6. While futures on the U.S. equity benchmark usually track the index, they don’t move in lockstep as the S&P 500 retreated less than 0.1 percent yesterday following a drop in consumer confidence. Caterpillar Inc. helped lead the Dow Jones Industrial Average higher on signs of growing demand for machinery in China.

The S&P 500, which is near its highest level in 17 months, has risen 9 of the past 11 days. The index increased 1 percent this week as economic reports showed a rebound in consumer demand after retail sales unexpectedly rose last month and wholesale inventories fell in January.

Forecasts for the biggest two-year rebound in profits since 1994 also fueled the advance. Analysts’ estimates show income for S&P 500 companies may climb 26 percent this year and 20 percent in the next. More than 72 percent of firms in the equity index beat earnings projections for the fourth quarter, the second-highest percentage on record, according to data compiled by Bloomberg.

“People are looking to buy stocks,” said Mark Bronzo, an Irvington, New York-based money manager at Security Global Investors, which oversees $21 billion. “Risk appetite seems to be growing as people become more comfortable with the sustainability of the economic recovery.”

The 11-day gain in S&P 500 futures exceeds a 10-day advance in January 1987. During that period, the stock benchmark jumped 9.6 percent and rose 5.4 percent the following month. The futures contracts were created in 1982 and trade on CME Group Inc.’s Chicago Mercantile Exchange.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJrxozH8Bx6s&pos=3

Here is the daily and the weekly charts for the $SPX:

Daily:



Weekly: