Investor optimism on U.S. stocks rose the most in two months last week after the government said economic growth accelerated and oil prices declined, according to an Investors Intelligence survey.
The proportion of bullish newsletter writers surveyed by the research firm, based in New Rochelle, N.Y., jumped to 44.8 percent from 37.9 percent a week earlier. That's the biggest increase since the week of March 17, when JPMorgan Chase & Co. bailed out Bear Stearns Cos. and the Federal Reserve made discount borrowing available to investment banks.
The number of bearish, or pessimistic, writers fell to 31.1 percent from 32.2 percent. The proportion of those surveyed who said they expect a so-called correction, or 10 percent slide, in the stock market during the next year dropped to 24.1 percent from 29.9 percent, the steepest decline since December 2005.
Some technical analysts, who try to predict stock moves based on price patterns and trading volume, track investor sentiment as a contrarian indicator. Increased optimism suggests stocks are poised to drop because investors who view the market favorably may have already bought shares.
The jump in optimism last week followed a 20 percent plunge in the proportion of bullish writers the week before, the biggest decline since the five-day period ended March 7. Many of the advisers surveyed are fearful of missing a large market move and quickly change their expectations when they perceive a shift is starting, Investors Intelligence said.
U.S. stocks rose last week, sending the Standard & Poor's 500 Index to its second straight monthly advance, after the government said the economy grew 0.9 percent in the first quarter, more than an earlier estimate, and oil dropped the most since March.
Dell Inc. climbed to a five-month high as overseas sales helped the second-largest personal-computer maker report more profit than analysts estimated. Big Lots Inc. and Polo Ralph Lauren Corp. rose the most in the S&P 500 after the retailers' earnings exceeded forecasts and oil prices fell 3.7 percen