U.S. Stocks Fluctuate

U.S. Stocks Fluctuate as Technology Shares Gain Before Earnings

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By Nikolaj Gammeltoft

July 12 (Bloomberg) -- U.S. stocks fluctuated a day after the Standard & Poor’s 500 Index completed its biggest weekly gain in a year as analyst upgrades lifted technology companies and commodity producers slipped on lower metal prices.

SanDisk Corp. gained 5.9 percent as UBS AG advised buying the stock, while Qualcomm Inc. jumped after Goldman Sachs Group Inc. added the shares to its “conviction buy” list. Hewitt Associates Inc. surged 33 percent as Aon Corp. agreed to buy the provider of payroll and consulting services. Alcoa Inc. slipped 0.9 percent before the largest U.S. aluminum company reports results after exchanges close today.

The S&P 500 increased 0.1 percent to 1,078.85 at 10:07 a.m. in New York and fell as much as 0.4 percent. The benchmark for U.S. stocks rallied 5.4 percent last week, its biggest gain since July 2009. The Dow Jones Industrial Average rose 4.76 points, or 0.1 percent, to 10,202.79.

The S&P 500 rebounded from a 10-month low last week as the International Monetary Fund raised its growth forecast and investors speculated a 16 percent selloff since April was overdone given the outlook for earnings.

Profits for S&P 500 companies are projected to have increased 34 percent in the April-June period and by the same amount in 2010, according to analysts’ estimates compiled by Bloomberg. A total of 23 companies in the S&P 500, including Google Inc. and Citigroup Inc., will report earnings this week.

SanDisk, Qualcomm

SanDisk Corp. surged 5.4 percent to $45.23. The flash-data storage company was raised to “buy” from “neutral” at UBS.

Qualcomm rose 3.4 percent to $35.07 as Goldman Sachs added the largest phone-chip producer to its “conviction buy” list, citing accelerating smartphone growth.

Computer and software shares have slumped to the lowest valuations in two decades, a sign to Barclays Wealth and UBS AG they will rebound as S&P 500 companies start spending their record cash.

Technology companies in the S&P 500 fell as much as 17 percent this year, pushing prices down to 15.6 times reported annual income, according to data compiled by Bloomberg. The biggest industry in the index hasn’t been this cheap since at least 1992, excluding the six months between Lehman Brothers Holdings Inc.’s bankruptcy and the start of the bull market in March 2009.