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    U.S. Stocks Hold on to Weekly Gain After October Jobs Report

    Nov. 4 (Bloomberg) -- U.S. stocks held on to their biggest weekly gain since September as weaker-than-forecast job growth failed to damp enthusiasm about the economy.

    ``We are in a very good economic environment,'' said David Chalupnik, who helps oversee $52.6 billion at First American Funds in Minneapolis. ``Growth is slowing to more of a trend- like pace, but we believe that's good.''

    Technology shares advanced after a sales forecast from Sanmina-SCI Corp., the world's third-largest maker of electronics for other companies, topped estimates. Energy companies, led by Halliburton Co., slumped along with oil prices.

    The Standard & Poor's 500 Index added 0.20 to 1220.14, the highest since Oct. 3. The Dow Jones Industrial Average rose 8.17, or 0.1 percent, to 10,530.76. The Nasdaq Composite Index gained 9.21, or 0.4 percent, to 2169.43.

    The S&P 500 had its second straight weekly advance, as a report showing increases in productivity and earnings from companies including Qualcomm Inc. spurred hope for a year-end rally. The index has posted gains in the fourth quarter in each of the last four years.

    The S&P 500 was up 1.8 percent this week, its best performance since the period ended Sept. 9. The Dow average increased 1.2 percent. The Nasdaq climbed 3.8 percent, its biggest weekly gain since August 2004.

    Federal Reserve

    This week's only retreat came on Nov. 1, when the Federal Reserve lifted rates for a 12th straight time to 4 percent. Anticipation of continued rate increases to combat inflation helped push the S&P 500 down 1.8 percent in October.

    The economy added 56,000 jobs in October, the Labor Department said. Economists expected a gain of 120,000 in a Bloomberg News survey. U.S. corporations also created 36,000 fewer jobs during the previous two months than first estimated.

    Not all investors saw the jobs figures as negative because signs of a slowing expansion may cause the Fed to ease up on its string of interest-rate increases.

    ``The concern was more that if it was a really strong number it would keep the pressure on the Fed to raise rates,'' said Jeffrey Swensen, head trader at Batterymarch Financial Management, which oversees $13 billion in Boston. ``I don't see an end to the up leg we've been on lately.''

    Sanmina-SCI jumped 75 cents, or 20 percent, to $4.41 for the best performance in the S&P 500. Sales this quarter will be as much as $2.9 billion. Michael Walker, an analyst with Credit Suisse First Boston and the No. 3-ranked electronics manufacturing services analyst in last year's Institutional Investor magazine survey, forecast $2.73 billion.

    A measure of technology shares advanced 0.6 percent, matching phone stocks for the biggest gain among 10 industry groups in the S&P 500.

    Energy Shares

    Energy shares declined as crude oil for December delivery dropped 1.9 percent to $60.58 a barrel in New York. Warm weather in the northern U.S. reduced demand, enabling retailers and wholesalers to replenish stockpiles.

    Halliburton, the world's largest oilfield-services company, dropped $3.57, or 5.5 percent, to $61.11 for its biggest drop in about a month. Exxon Mobil Corp., the biggest publicly traded oil company, decreased 67 cents to $57.90 and was the biggest drag on the S&P 500.

    A gauge of energy shares lost 2.4 percent for the worst performance among the S&P 500 groups. The gauge has rallied 29 percent this year, almost triple the gain in utility stocks, the second best performer of 10 industry measures.

    Profit Reports

    Third-quarter profit at S&P 500 companies is up 15 percent on average, less than the 17 percent climb in the July-through- September period last year. Of S&P 500 companies that have reported earnings, 65 percent have surpassed analysts' estimates gathered by Thomson Financial. That's more than the historical average of 59 percent in the last 10 years.

    Hartford Financial Services Group Inc., an insurer of homes and businesses, jumped $3.11 to $84.02. The company said that it earned $1.82 a share before investment losses in the third quarter, exceeding the $1.59 expected by Morgan Stanley analyst Nigel Dally.

    Starbucks Corp. added 93 cents to $30.36. The largest U.S. coffee-shop chain said October sales at stores open more than a year rose 7 percent. That beat the same-store sales gain of 4 percent projected by UBS AG analyst David Palmer, who rates the shares ``buy.''

    Seven stocks fell for every six that rose on the New York Stock Exchange. About 1.53 billion shares changed hands on the Big Board, the lowest in almost three weeks.

    Pfizer, Guidant

    Pfizer Inc. rose 39 cents to $22.26 after the world's biggest drugmaker won European approval to sell its Viagra male- impotence medicine to treat pulmonary arterial hypertension, a lung disorder.

    Guidant Corp., the second-biggest maker of implantable defibrillators, added $1.35 to $58.92. Guidant may use the threat of a lawsuit to pressure Johnson & Johnson to complete a $25.4 billion acquisition agreed to in December. J&J said this week that as a result of government probes into Guidant's heart devices, it may abandon the purchase unless Guidant will accept less than the per-share price of $76. J&J, the world's biggest maker of medical devices, lost 32 cents to $60.88.

    Shares of Apple Computer Inc. and Morgan Stanley retreated on analyst downgrades at Prudential Equity Group LLC and Merrill Lynch & Co., respectively.

    Apple fell 70 cents to $61.15. Shares of the maker of the iPod music player are unlikely to extend their gains even if the company reports ``strong'' earnings this quarter and into 2006 as expected, Prudential analyst Steven Fortuna wrote in a note to clients. He cut his Apple rating to ``neutral weight'' from ``overweight.''

    Morgan Stanley Drops

    Morgan Stanley dropped 31 cents to $52.41 after earlier falling as low as $51.90. The No. 2 U.S. securities firm by market value still faces legal action over the 1998 sales of Coleman Co, and earnings from trading will ``take time'' to turn around, said Merrill analyst Guy Moszkowski in a note to clients. Moszkowski, ranked first among analysts of brokerages and asset managers in this year's Institutional Investor magazine survey, cut the shares to ``neutral'' from ``buy.''

    Expedia Inc. gained $2.02 to $22.73. The online travel agency spun off by Barry Diller in August said third-quarter profit excluding some costs was 35 cents a share. On that basis, Expedia was expected to earn 30 cents, said Piper Jaffray & Co. analyst Aaron Kessler, the top-ranked for accuracy by Starmine Professional.

    Spiders, QQQQs

    S&P 500 shares, called Spiders, slipped 16 cents to $122.11. Nasdaq-100 tracking shares, known by their QQQQ symbol, rose 14 cents to $40.08.

    S&P 500 futures expiring in December lost 1.70 to 1222 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures advanced 3.50 to 1632.50.

    The Russell 2000 Index, a benchmark for companies with a median market value of $563 million, fell 0.1pfe percent to 658.16. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, was little-changed, down 1.06 at 12,194.17. Based on the changes in the Wilshire, the value of stocks decreased by $1.33 billion.



 
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