-Stocks Gain

Most U.S. Stocks Gain, Led by Energy, Technology Companies 

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By Whitney Kisling

Dec. 9 (Bloomberg) -- Most U.S. stocks gained for a third day as investors snapped up technology and energy shares trading near their cheapest levels on record, overshadowing disappointed forecasts at companies from FedEx Corp. to Danaher Corp.

National Semiconductor Corp., the maker of chips for the five largest mobile-phone companies, jumped 15 percent even after forecasting sales that trailed analysts’ estimates. Chesapeake Energy Corp. jumped 10 percent to lead gains in oil and natural-gas producers. FedEx lost 11 percent after saying a “significantly weaker” economy will crimp profits, while Danaher Corp., maker of Craftsman tools, slid 1.6 percent.

Almost five stocks rose for every two that fell on the New York Stock Exchange. The Standard & Poor’s 500 Index increased 0.4 percent to 913.27 at 10:53 a.m. in New York. The Dow Jones Industrial Average declined 32.42 points, or 0.4 percent, to 8,901.76 and Nasdaq Composite Index added 1.8 percent to 1,599.62.

The S&P 500 extended its gain from an 11-year low last month to 21 percent yesterday, marking a technical end to the 14-month bear market as President-elect Barack Obama pledged the biggest public-works spending package since the 1950s. The benchmark index is down 39 percent in 2008 after the collapse of subprime mortgages curbed earnings for five straight quarters.

European shares rose for a second day and Asian stocks climbed for a third, led by commodity producers and shipping lines, on expectations stimulus plans from the U.S. to India will buoy the global economy.

The gains in computer companies came as companies in the S&P 500 Information Technology Index traded at 13.8 times reported profits, less than half their average price-to-earnings ratio over the last five years.

Energy shares in the S&P 500 traded at 6.7 times earnings, near last month’s low of 5.6, which was the cheapest level since Bloomberg began tracking the data in 1995.

$1 Trillion

More than $31 trillion has been erased from the value of global equities this year, while debt losses and writedowns at the world’s largest lenders and insurers approach $1 trillion.

Stocks will climb in 2009 in the face of falling earnings and a slowdown in economic growth because of cheap valuations, according to strategists at Credit Suisse Group AG, Deutsche Bank AG and Merrill Lynch & Co. The S&P 500 may rise to 1,050 by the end of 2009 from yesterday’s close price of 909.7, a team of Credit Suisse strategists wrote in a note today. Goldman Sachs Group Inc. chief investment strategist David Kostin projected a 21 percent gain by the end of next year as the economy stabilizes.