A rally in commodity producers helped the U.S. stock market overcome the first drop in financial shares in three days sparked by weakening consumer confidence and predictions of more credit losses on Wall Street.
The Standard & Poor's 500 Index rose for a third day after falling as much as 0.6 percent. The Dow Jones Industrial Average retreated, led by Bank of America Corp. and Home Depot Inc. Monsanto Co., the world's biggest seed producer, led materials companies to the biggest gain among the 10 industry groups in the S&P 500 after boosting its earnings forecast. Freeport- McMoRan Copper & Gold Inc., Newmont Mining Co. and Alcoa Inc. climbed as metal prices increased.
Five stocks gained for every three that fell on the New York Stock Exchange. The S&P 500 rose 2.66 points, or 0.2 percent, to 1,352.54 at 12:49 p.m. in New York. The Dow slipped 29.23, or 0.2 percent, to 12,519.41. The Nasdaq Composite Index added 6.74, or 0.3 percent, to 2,333.49.
The S&P 500 has rebounded 6.2 percent from a 19-month low on March 10 after the Federal Reserve injected more cash into the banking system and slashed interest rates in an attempt to restore confidence in financial markets. Asian and European shares advanced on speculation the JPMorgan takeover of Bear Stearns Cos. will reduce the risk of banks collapsing.
Monsanto raised its full-year earnings forecast to $3.15 to $3.25 a share, from an earlier prediction of as much as $2.80. Monsanto added $9.27, or 8.9 percent, to $113.53 and contributed the most to the materials group's 2.6 percent advance.
Mining Rally
Mining companies gained as a drop in the dollar pushed gold higher and silver, copper and aluminum also rose. Freeport- McMoRan Copper & Gold Inc. climbed $3.69 to $92.45. Newmont Mining Co., the world's second-largest gold producer, added $1.40 to $46.86. Alcoa Inc., the world's third-largest aluminum producer, increased 67 cents to $35.71 for the biggest gain in the Dow average.
Yahoo Inc. rose 90 cents to $28.42. The stock was upgraded to ``buy'' from ``hold'' at Citigroup, which also increased its price estimate on the shares to $34 from $31 on expectations that Microsoft Corp. will raise its bid for the most-visited U.S. Web site.
``Microsoft remains committed to its unsolicited $31 bid offer and is capable of and willing to increase that bid in order to conclude this deal,'' Citigroup analysts including San Francisco-based Mark Mahaney wrote in a report dated yesterday.
Qualcomm
Qualcomm Inc. climbed 72 cents to $40.61. Merrill analyst Tal Liani said in a note to clients that demand for third- generation phones should accelerate in 2008, ``regardless of pressure on consumer spending.''
Bank of America, the second-biggest U.S. bank by assets, fell $1.47 to $40.98. The stock was downgraded to ``sell'' from ``neutral'' at Merrill Lynch, which also reduced its earnings estimates to account for credit losses.
Merrill lost 35 cents to $48.03. The biggest U.S. brokerage may report $5 billion in additional losses on collateralized debt obligations and other mortgage-related securities in the first quarter, analysts at JPMorgan Chase & Co. said. They lowered their 2007 earnings estimate to $2.75 a share from $5 a share.
Lehman Brothers Holdings Inc., the biggest underwriter of U.S. mortgage bonds, tumbled $1.31 to $45.33 after analysts at Fox-Pitt Kelton Cochran Caronia Waller reduced profit estimates.
The Conference Board's consumer confidence index fell to 64.5, a five-year low, from a revised 76.4 in February, the research group said. The group's measure of expectations for the next six months slumped to 47.9, the lowest since December 1973, a private survey also showed today.
Home prices in 20 U.S. metropolitan areas fell in January by the most on record, a sign the housing recession is deepening, a private survey showed. The S&P/Case-Shiller home- price index dropped 10.7 percent in January from a year earlier. The gauge has fallen for 13 consecutive months.
Home Depot, the largest home-improvement retailer, slid 67 cents to $28.59. Lowe's, its smaller rival, lost 68 cents to $23.61.
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