U.S. Stocks Gain, Led by Oil, Technology Shares; Intel Rises

June 28 (Bloomberg) -- U.S. stocks rose, led by fuel producers and technology companies, after oil prices jumped and analysts upgraded Intel Corp. and Cisco Systems Inc. on prospects for profit growth.

Exxon Mobil Corp. and Chevron Corp., the biggest U.S. oil companies, advanced after crude prices rose to a nine-month high. Intel, the world's largest computer-chip manufacturer, and Cisco Systems, the biggest maker of networking equipment, led the Standard & Poor's 500 Index higher for a second day.

The potential for higher profit growth at technology companies and energy producers helped equities rebound from early losses spurred by a government report showing inflation climbed more than forecast in the first quarter. Economists expect the Federal Reserve to leave interest rates unchanged after meeting today and for the rest of the year.

``People are underestimating what earnings are going to do here,'' said Wayne Wicker, who helps oversee $31.5 billion as chief investment officer of Vantagepoint Funds in Washington. ``Increasing earnings and global growth are going to be responsible for higher equity prices later on this year.''

The S&P 500 rose 4.61, or 0.3 percent, to 1510.95 as of 12:42 p.m. in New York. The Dow Jones Industrial Average climbed 20.64, or 0.2 percent, to 13,448.37. The Nasdaq Composite Index added 11.3, or 0.4 percent, to 2616.65.

Oil Climbs

Crude oil for August delivery rose 1.7 percent to $70.14 a barrel in New York as U.S. refineries increased output of gasoline and other fuels.

Exxon added 42 cents to $83.90. Chevron climbed 61 cents to $84.50.

Technology shares in the S&P 500 increased 0.4 percent as a group and contributed the most to the index's advance.

Intel gained 22 cents to $24.01. Lehman Brothers upgraded the shares to ``overweight'' from ``equal weight,'' saying a new series of semiconductors designed for laptop computers may boost revenue and earnings growth.

Cisco climbed 93 cents to $28.20. Merrill Lynch & Co. upgraded the world's largest maker of computer networking equipment to ``buy'' from ``neutral,'' saying fiscal fourth- quarter earnings may exceed analysts' estimates on ``strong'' business demand.

Dillard's Inc. had the S&P 500's top gain after a group of investors sent a letter to the department-store chain urging management to take action that will lift the share price. The stock added $3.06, or 9 percent, to $36.99.

Dominion Resources Inc. jumped $3.94 to $87.49 after the largest U.S. utility owner said it will offer to buy back almost 16 percent of its stock, following through on a plan to use cash from sales of oil and gas assets to reduce shares outstanding.

Monsanto

Monsanto Co. added $1.24 to $67.24. The world's biggest seed producer said third-quarter profit jumped to $1.03 a share from 60 cents a year earlier as U.S. corn farmers bought more of the company's products to meet rising demand for ethanol and animal feed. Profit was projected to be $1 a share, the average estimate of eight analysts surveyed by Bloomberg.

A gauge of raw-materials producers in the S&P 500 climbed 0.5 percent, helped also by the biggest jump in copper prices in two weeks and a second day of gains in the price of gold.

Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper company, added 94 cents to $83.01.

Airlines climbed after JPMorgan upgraded the industry and said it expects mergers next year. American Airlines parent AMR Corp. added 96 cents to $26.81. Alaska Air Group Inc., parent of Alaska Airlines, rose $1.49 to $28.45. United Airlines parent UAL Corp. increased $1.33 to $40.28.

The Fed's preferred measure of inflation, which strips out food and energy costs, climbed at a 2.4 percent annual rate, faster than economists' forecast and the government's previous estimate, both of which were 2.2 percent. The economy grew at an annual rate of 0.7 percent in the first quarter, the slowest pace in four years.

The policy-making Federal Open Market Committee will hold its target for the benchmark overnight-lending rate between banks at 5.25 percent for an eighth consecutive meeting today, according to the unanimous forecast of economists surveyed. The announcement is due at about 2:15 p.m.