By Rita Nazareth Feb. 8 (Bloomberg) — U.S. stocks fluctuated as analyst upgrades lifted Home Depot Inc., Google Inc. and Amazon.com Inc. while a weaker dollar boosted commodities, offsetting concern over deteriorating European government finances. Home Depot rallied 3 percent as Morgan Stanley advised buying the shares, while Google climbed as Bank of America Corp. added the company to its “U.S. 1” list of favorite stocks. Alcoa Inc. and Exxon Mobil Corp. rose at least 1.1 percent as oil and metal prices rebounded from last week’s slide. JPMorgan Chase & Co. and Bank of America had the biggest declines in the Dow Jones Industrial Average. The Standard & Poor’s 500 Index increased 0.2 percent to 1,068.48 at 12:03 p.m. in New York. The Dow decreased 19.49 points, or 0.2 percent, to 9,992.74. The Nasdaq Composite Index rose 0.3 percent to 2,146.82. “There’s risk aversion,” said Michael Holland , who oversees more than $4 billion as chairman of Holland & Co. in New York. “Good economic and corporate data points in the U.S. are being offset by uncertainties in Europe. Investors should continue to be mindful. I wouldn’t be surprised to see the market flat to down this week.” U.S. stocks have retreated for four straight weeks, the longest losing streak since July. Stocks rallied in the final hour of trading on Feb. 5, with the Dow Jones Industrial Average erasing a 167-point drop, on speculation the European Union would devise a solution for the budget deficits. European Central Bank President Jean-Claude Trichet said the ECB is “confident” Greece will cut its deficit below the limit of 3 percent of gross domestic product in 2012 from 12.7 percent. G-7 Meeting “The European members of the G-7 will make sure it is managed,” French Finance Minister Christine Lagarde told reporters on Feb. 6 after meeting counterparts and central bankers from the Group of Seven in Iqaluit, Canada. The S&P 500 has still surged 58 percent from a 12-year low on March 9 as governments and central banks globally maintained low interest rates and committed more than $12 trillion to stimulate economic growth. The Group of Seven finance ministers pledged to press ahead with economic stimulus measures even as investors intensify their focus on mounting budget deficits. “We need to continue to deliver the stimulus to which we are mutually committed and begin looking at exit strategies to move to a more sustainable fiscal track,” Canadian Finance Minister Jim Flaherty told reporters yesterday. Credit Rating The U.S. is in no danger of losing its Aaa debt rating, Treasury Secretary Timothy F. Geithner said in an ABC News interview broadcast yesterday. Even so, UBS AG advised clients to further reduce their holdings in equities for a second time in as many weeks. Economist Larry Hatheway and strategist Kenneth Liew reduced their equity allocation to “neutral” from “a small overweight,” saying “resolution of the challenges facing Greece, Portugal and Spain is likely to take time and as a result risk premiums will remain elevated.” Shares of companies that rely on discretionary spending added 0.9 percent for the biggest gain among 10 industries in the S&P 500. Home Depot gained 3 percent to $28.83. The retailer was raised to “overweight” from “equal-weight” at Morgan Stanley. Amazon, Homebuilders Rally Amazon.com Inc. rose 1.4 percent to $119.05. The world’s largest Internet retailer was raised to “buy” from “hold” by Collins Stewart, which cited sales of the company’s Kindle e- reader device and web services arm. Homebuilders in the S&P 500 surged 3.6 percent as a group after the Wall Street Journal said the industry is looking “a lot less bad,” citing fewer write-downs and new-home order cancellations and improved order rates. Lennar Corp., Pulte Homes Inc. and D.R. Horton Inc. advanced at least 3.7 percent. “The decline of last week was overdone,” said Stanley Nabi , New York-based vice chairman of Silvercrest Asset Management Group, which manages $8.5 billion. “There’s nothing in the U.S. market that justified last week’s selloff. The U.S. is emerging as more stable. The economy and corporate earnings are improving.” Gauges of energy and raw-materials advanced more than 0.4 percent as the dollar fell, boosting demand for commodities as an alternative investment. Exxon, Alcoa Exxon Mobil, the world’s biggest energy company, climbed 1.1 percent to $65.10. Alcoa, the largest U.S. aluminum maker, jumped 2.2 percent to $13.47. Google shares gained 1.6 percent to $539.97. The Internet search company was added to Bank of America-Merrill Lynch’s “U.S. 1” list because the company “remains an attractive macro-economic recovery play,” analysts wrote in a note to clients. Motorola Inc. climbed 4.2 percent to $6.67. The mobile- phone maker may rise as much as 40 percent during the next year if it spins off its mobile-phone unit and revenue from the radio and data-communications equipment division increases, Barron’s reported. Hasbro Inc. rose the most in the S&P 500, jumping 14 percent to $35.03. The maker of “Transformers” robot toys reported fourth-quarter earnings excluding some items of $1.09 a share, topping the average analysts’ estimate by 34 percent, according to Bloomberg data. Financials The S&P 500 Financials Index dropped 0.5 percent for the biggest decline among 10 industries. JPMorgan and Bank of America fell more than 0.9 percent. American Express Co., the biggest credit-card issuer by purchases, retreated 0.5 percent to $37.64. “Financials are underperforming the broader market,” said Art Hogan , the chief market analyst at New York-based Jefferies & Co. “It’s a very tricky space. There’s concern over sovereign debt issues in Europe and their resolution. This is going to take a long time to play out.” CIT Group Inc. jumped 2.5 percent to $31.51. John Thain , the ousted chief of Merrill Lynch & Co., was named to lead the commercial lender that emerged from bankruptcy in December after almost a four-month search for a replacement. To contact the reporter responsible for this story: Rita Nazareth in New York at rnazareth@bloomberg.net .
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Stocks in U.S. Fluctuate as Analyst Upgrades Offset European Debt Concerns
