* S&P 500 on pace for first weekly loss of year
* Hewlett-Packard rallies after results, lifting tech shares
* Abercrombie & Fitch leads decliners after disappointing results
* Indexes up: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.4 pct
By Ryan Vlastelica
NEW YORK, Feb 22 (Reuters) - U.S. stocks rebounded on Friday as Hewlett-Packard, the largest personal computer maker, surged on strong results, but the S&P 500 index was on the way to end a streak of gains that has lasted seven straight weeks.
The S&P shed 1.9 percent over the previous two sessions, its worst two-day drop since early November, putting the index on pace for its first weekly decline of the year. The retreat was triggered when the Federal Reserve’s meeting minutes for January suggested stimulus measures may be halted sooner than thought.
Still, the index is up nearly 6 percent for the year and held the 1,500 support level despite the recent declines, a sign of a positive bias in the market.
“The market is addicted to Fed stimulus and gets withdrawal shakes every time that’s threatened, but now we’re resuming our course and remain much more attractively valued than other asset classes,” said Rex Macey, chief investment officer at Wilmington Trust in Atlanta, Georgia.
Hewlett-Packard Co jumped 9.6 percent to $18.74 as the top boost on both the Dow and S&P 500 after the PC maker’s quarterly revenue and forecasts beat expectations. The company cut costs under Chief Executive Meg Whitman’s turnaround plan. The S&P technology sector was up 0.6 percent.
The Dow Jones industrial average was up 52.22 points, or 0.38 percent, at 13,932.84. The Standard & Poor’s 500 Index was up 5.25 points, or 0.35 percent, at 1,507.67. The Nasdaq Composite Index was up 13.45 points, or 0.43 percent, at 3,144.94.
For the week, the Dow is off 0.3 percent in its third straight week of slight losses, the S&P is off 0.7 percent and the Nasdaq is off 1.4 percent.
Also buoying tech stocks were gains in semiconductor companies after Marvell Technology Group Ltd forecast results this quarter that were largely above analysts’ expectations as it gained market share in the hard-disk drive and flash-storage businesses.
In addition, Texas Instruments Inc raised its dividend by a third and boosted its stock buyback program. Texas Instruments rose 4.3 percent at $33.88 while Marvell added 2.2 percent at $9.67. The PHLX semiconductor index gained 1.3 percent.
“Dividends growing are another way the market’s level is justified, if not especially attractive at these levels,” said Macey, who manages about $20 billion in assets.
On the downside, Abercrombie & Fitch dropped 7.3 percent to $45.49 after the clothing retailer reported a drop in fourth-quarter comparable sales, even as its latest quarterly earnings topped estimates.
Insurer American International Group Inc posted fourth-quarter results that beat analysts’ expectations. Shares advanced 2.6 percent to $38.26.
According to Thomson Reuters data through Friday morning, of 439 companies in the S&P 500 that have reported results, 70 percent have exceeded analysts’ expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 6 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.