wall street on firmer ground?

U.S. Stocks Advance for a Third Week; Federated, Monsanto Rise

Nov. 12 (Bloomberg) -- U.S. stocks rose for a third week, the longest streak since July, as a retreat in oil prices spurred optimism that consumer spending and corporate profits will support a fourth-quarter rally.

``It's helpful to have energy prices backing off like they have been recently,'' said Joseph Stocke, who oversees $700 million as chief investment officer at StoneRidge Investment Partners in Malvern, Pennsylvania. ``That makes people feel better and should help as we go into the end of the year.''

Federated Department Stores Inc., the owner of Macy's and Bloomingdale's, gained after reporting better-than-expected profit. Monsanto Co., the world's biggest developer of genetically modified crops, led raw-material stocks higher as it lifted its fiscal 2007 profit forecast.

The Standard & Poor's 500 Index rose 1.2 percent to 1234.72 in the past five days. The index jumped 4.7 percent the past three weeks, the biggest rally of that length since November 2004 and the longest streak since a five-week advance in July.

The Dow Jones Industrial Average increased 1.5 percent to 10,686.04. The Nasdaq Composite Index, which gets more than two- fifths of its value from technology shares, added 1.5 percent to 2202.47, helped by an advance in Intel Corp. shares after the company announced the second-largest U.S. share repurchase ever.

Gains in the indexes were limited as energy shares, the S&P 500's best performers this year, fell with the price of crude. A retreat by oil and gas stocks such as Valero Energy Corp. had helped send the S&P 500 down 1.8 percent in October.

Late-Year Rally

The benchmark has rebounded 2.3 percent this month and may climb further, if history is any indication. November marks the start of what since 1950 has been the most rewarding six-month stretch for the S&P 500, according to the Stock Trader's Almanac. Declining energy prices also helped the index rally in the fourth quarter last year.

Crude oil for December delivery slid 5 percent this week to $57.53 a barrel in New York, the lowest since July 21, as rising U.S. imports made up for production shut by storms in the Gulf of Mexico. Prices have fallen 19 percent since reaching a record $70.85 on Aug. 30.

Federated climbed 7.3 percent to $68.82. The company said that excluding costs to acquire May Department Stores Inc. and a gain on the sale of credit-card accounts, it had profit of 36 cents a share in the third quarter ended Oct. 29. On that basis, Federated was expected to earn 23 cents, according to the average estimate of analysts in a Thomson Financial survey.

Retailers such as Federated also got a boost from a report that showed confidence among U.S. consumers was higher than expected. The University of Michigan's preliminary index rose to 79.9 this month from 74.2 in October. Economists expected a reading of 76.5, according to a Bloomberg News survey.

Earnings

Earnings at S&P 500 companies are up 15 percent this quarter with 90 percent of index members reporting, according to a Bloomberg analysis of Thomson data. Almost two-thirds have beaten analysts' expectations, higher than the 10-year average of 59 percent.

``We're just about through the earnings season, and I think analysts are liking what they're hearing about the fourth quarter and next year,'' said Stuart Freeman, chief equity strategist at A.G. Edwards & Sons in St. Louis. ``If energy prices stay flat to down as we move toward the end of the year, as investors expect, I think there's more upward move ahead'' for the stock market, he said.

Monsanto

Monsanto increased 10 percent to $69.82. The company said that 2007 net income will be $2.82 to $3 a share, higher than a June projection of $2.81 to $2.93.

An S&P 500 measure of raw-material shares such as Monsanto rallied 2.4 percent this week for the second-biggest advance among 10 industry groups. Alcoa Inc., the world's No. 1 aluminum maker, climbed 6 percent to $26.68 for the steepest gain in the Dow average.

Intel, the No. 1 computer-chip maker, added 4.8 percent to $25.13 after it said plans to buy back $25 billion in stock, a buyback only surpassed by Microsoft Corp.'s $30 billion repurchase. Intel also increased its dividend by 25 percent to 10 cents a share.

Financial Shares

A gauge of financial shares climbed 3.2 percent, the best performance in S&P 500 for the week, amid speculation that the drop in energy costs will limit the Federal Reserve's interest- rate increases. The Fed has lifted its target rate 12 straight times to 4 percent and indicated last week that further increases will follow.

Morgan Stanley, the No. 2 U.S. securities firm by market value, advanced 5.5 percent to $55.28. Citigroup Inc., the largest financial-services company, added 5.3 percent to $48.

A measure of energy stocks slumped 3.8 percent, trimming its gain for the year to 24 percent. Valero, the largest U.S. oil refiner, slid 8.6 percent to $96.31.

This week's only retreat in benchmark indexes came on Nov. 8, after Toll Brothers Inc. reduced its sales forecast, spurring concern that the housing boom has peaked. Shares of the No. 1 U.S. builder of luxury homes sank 12 percent to $34.18 for the full week.

General Motors Corp. slid 8.6 percent to $24.48 for the worst performance in the Dow average. The world's biggest automaker said on Nov. 9 that it will restate 2001 earnings, lowering profit by as much as $400 million. The shares the next day reached their lowest in 13 years.

A gauge of auto-related companies lost 2.4 percent for the second-steepest drop among 24 industry groups in the S&P 500. Visteon Corp. tumbled 25 percent to $6.48 for the worst performance in the benchmark. The second-biggest U.S. auto-parts maker reported a third-quarter net loss of $200 million.