* 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
* Indexes up: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.4 pct
By Ryan Vlastelica
NEW YORK, Feb 22 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
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
"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
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.