By Michael Patterson
March 3 (Bloomberg) -- Most U.S. stocks gained as record oil and gold prices spurred a rally in commodity producers, outweighing declines in technology and financial shares.
Exxon Mobil Corp. and Freeport-McMoRan Copper & Gold Inc. helped the Standard & Poor's 500 Index recover from a decline of 0.8 percent and rise for the first time in four days. Goldman Sachs Group Inc., the largest U.S. securities firm, and Apple Inc., maker of the iPod media player, fell after analysts lowered profit estimates.
The S&P 500 swung between gains and losses at least 37 times as a smaller-than-forecast drop in manufacturing offset a decline in construction spending. The S&P 500 added 0.71 point, or 0.1 percent, to 1,331.34. The Dow Jones Industrial Average slid 7.49, or 0.1 percent, to 12,258.9. The Nasdaq Composite Index lost 12.88, or 0.6 percent, to 2,258.6. On the New York Stock Exchange, 949 stocks rose and 930 fell.
``If you're trying to be optimistic on the market going forward, one potential positive is you're in a situation where energy outperformance can make up for some of the underperformance in financials,'' said Michael Gallipo, who helps manage about $800 million at Citizens Funds in Portsmouth, New Hampshire. ``It seems to be working for right now.''
Commodity producers rose as oil climbed to $102.45 a barrel and gold advanced to as high as $992 an ounce. Energy and metals shares have gained 15 percent since the Federal Reserve started cutting interest rates in August, more than triple the next best group, consumer staples.
Exxon, the biggest U.S. oil company, added 74 cents to $87.75. ConocoPhillips, the third-largest, increased 73 cents to $83.44. The 36-member S&P 500 Energy Index climbed 0.8 percent and provided the biggest boost to the overall index.
Freeport-McMoRan, the world's second-largest copper producer, climbed $2.59 to $103.45 and led a gauge of raw- materials producers in the S&P 500 to a 1.6 percent gain, the best among 10 industries. Copper futures closed at the highest price ever as global inventories declined and China, the world's biggest user of the metal, boosted imports. Newmont Mining Corp., the second-largest gold mining company, rose $1.21 to $52.38.
General Electric Co., Honeywell International Inc. and Danaher Corp. climbed after Deutsche Bank AG analysts said U.S. industrial companies that generate more than half their revenue from abroad may boost earnings by 5 percent during the first quarter as the dollar weakens. The U.S. currency today touched a record low of $1.5275 per euro.
GE, the second-biggest U.S. company by market value, added 26 cents to $33.40. Honeywell, the largest maker of aircraft controls, increased $1.01 to $58.55. Danaher, the maker of Craftsman tools, added 11 cents to $74.26.
Northrop Grumman Corp. rose the most since July 2003 after the third-largest U.S. defense contractor and European Aeronautic, Defence & Space Co. beat Boeing Co. for an Air Force tanker order valued at as much as $35 billion. Northrop shares added $3.96, or 5 percent, to $82.57. Boeing lost $2.12 to $80.67. Industrial shares in the S&P 500 climbed 0.6 percent as a group, paring their 2008 decline to 6.9 percent.
Exelon Corp., Entergy Corp. and FPL Group Inc. led a 1.2 percent advance in the S&P 500 Utilities Index after Jefferies & Co. analysts advised clients to buy the shares.
Exelon, the largest U.S. owner of nuclear power plants, added $2.70 to $77.55. Entergy, the second-biggest, increased $2.71 to $105.45. FPL Group, owner of Florida's largest electric utility, gained $1.06 to $61.35.
Supervalu Inc. rose $1.84, or 7 percent, to $28.09 for the top gain in the S&P 500. The second-biggest U.S. supermarket chain forecast profit for next year that exceeded analysts' estimates.
Financial and technology companies were the biggest drag on the market after analysts said the slowing U.S. economy and more subprime-mortgage writedowns will stifle earnings at securities firms and weakening consumer spending will hurt demand at electronics makers and online retailers.
Financial shares in the S&P 500, which are down 13 percent this year, fell for a third day after analysts at Merrill Lynch & Co., Oppenheimer & Co. and Sanford C. Bernstein & Co. cut their profit estimates for brokerages. Earnings at S&P 500 financial companies may fall 28 percent on average in the first quarter, according to analysts' estimates compiled by Bloomberg. That compares with a 3 percent average decline projected for the entire index.
``The capital-markets environment can now officially be called rotten for first-quarter earnings,'' Oppenheimer's Meredith Whitney said in a note to clients as she cut her full- year earnings forecasts for Goldman, Bear Stearns Cos. and Lehman Brothers Holdings Inc.
Goldman, the biggest U.S. securities firm by market value, dropped $4.55 to $165.08. Bear Stearns lost $2.54 to $77.32. Lehman fell $2.38 to $48.61. Citigroup Inc., the largest U.S. bank by assets, retreated 62 cents to $23.09.
American International Group Inc. led losses in 21 of 24 insurance companies in the S&P 500 after billionaire investor Warren Buffett said the insurance business will be less profitable this year. AIG, the world's largest insurer, slumped 17 cents to $46.69.
'Party Is Over'
``It is a certainty that insurance industry profit margins, including ours, will fall significantly in 2008. Prices are down,'' Buffett wrote in his annual letter to shareholders. ``That party is over.''
Buffett's Berkshire Hathaway Inc. said fourth-quarter profit declined 18 percent on falling insurance rates. Operating earnings excluding some items dropped to $1,518 a share, missing the $1,613 average of three analysts' estimates compiled by Bloomberg.
Berkshire's Class A shares lost $3,500, or 2.5 percent, to $136,500.
The S&P 500 Financials Index lost 1.2 percent for the biggest decline among 10 industries.
A gauge of technology companies in the S&P 500 dropped 0.6 percent after Bank of America Corp. cut its profit estimates for Apple and Piper Jaffray & Co. lowered its recommendation on Internet-related companies.
Apple declined $3.29 to $121.73 after Bank of America analyst Scott Craig said weaker consumer spending in the U.S. will slow profit growth.
Google Inc., owner of the most popular Internet search engine, and EBay Inc., the world's biggest online auctioneer, declined after Piper Jaffray said lower-than-expected revenue from search-related online advertising and weak retail sales growth may prompt analysts to reduce their 2008 earnings estimates.
Google shares dropped $14.16 to $457.02, the lowest in almost a year. EBay slumped 51 cents to $25.85. The S&P 500 Information Technology Index has declined 17 percent this year.
The Institute for Supply Management's manufacturing index fell less than economists expected in February. The Tempe, Arizona-based group's gauge dropped to 48.3 from 50.7 in January. Economists surveyed by Bloomberg News forecast the index would fall to 48. Fifty is the dividing line between contraction and expansion.
Spending on U.S. building projects fell in January by the most in 14 years as the housing slump worsened and construction slowed on hotels and highways. The 1.7 percent decrease, more than twice the fall economists forecast, followed a revised 1.3 percent drop in December that was steeper than initially reported, the Commerce Department said.
Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank's benchmark interest rate, currently at 3 percent, is below the level recommended by ``many'' monetary-policy theories and should be raised when financial markets stabilize. He spoke to a conference in Arlington, Virginia.
The MSCI World Index decreased 2 percent. Europe's Dow Jones Stoxx 600 Index lost 1.4 percent, and the MSCI Asia Pacific Index fell 3.3 percent.
Treasury 10-year notes fell, with yields at the highest level relative to two-year rates in more than 3 1/2 years, on bets Fed cuts in borrowing costs will cause inflation to accelerate.