By Eric Martin Enlarge Image/Details Aug. 20 (Bloomberg) -- U.S. stocks climbed after better- than-estimated earnings from Hewlett-Packard Co. spurre

By Eric Martin
Enlarge Image/Details

Aug. 20 (Bloomberg) -- U.S. stocks climbed after better- than-estimated earnings from Hewlett-Packard Co. spurred a technology company rally and Fannie Mae's chief executive officer said the mortgage financier is getting record new business.

Hewlett-Packard, the largest personal-computer maker, rose 5.3 percent for the biggest gain in the Dow Jones Industrial Average after demand for notebooks and orders in Europe and Asia spurred profit and sales. Lehman Brothers Holdings Inc., Bank of America Corp. and American International Group Inc. gained 4 percent on speculation mortgage losses will abate. Fannie Mae halved a 21 percent decline after CEO Daniel Mudd said the company hasn't asked for a government bailout.

The Standard & Poor's 500 Index increased 6.85 points, or 0.5 percent, to 1,273.54 at 11:28 a.m. in New York. The Dow average added 66.03, or 0.6 percent, to 11,414.58, and the Nasdaq Composite Index climbed 17.80, or 0.8 percent, to 2,402.16. Two stocks rose for each that fell on the New York Stock Exchange.

``There's not a lot of news to grasp onto in these last two weeks of August, so what news does come out and is positive, investors are flocking to that,'' Leo Grohowski, who helps oversee $162 billion as chief investment officer at Bank of New York Mellon Wealth Management, told Bloomberg Television. ``Investors will have rolling opportunities to get into the financials.''

Profit Reports

About 70 percent of technology companies in the S&P 500 including EMC Corp. and Intel Corp. reported better-than- estimated earnings for the previous quarter. Industry earnings are forecast to climb 17 percent this year, compared with the analyst estimate of a 0.2 percent profit decline for all S&P 500 companies, data compiled by Bloomberg show.

The S&P 500, the U.S. stocks benchmark that's down 14 percent in 2008, has clawed back 4.6 percent from its July 15 low as crude oil's retreat from a record and the Federal Reserve's decision to keep interest rates on hold eased inflation concerns.

Hewlett-Packard added $2.31 to $46. Excluding acquisition costs, third-quarter profit was 86 cents a share, exceeding the 84 cents anticipated by analysts on average in a Bloomberg survey. Its earnings forecast for this quarter topped estimates.

Dell Inc., the second-largest personal-computer maker, advanced 27 cents to $24.71. International Business Machines Corp., the No. 2 software company, rose 62 cents to $123.18. Apple Inc., the seller of iPhones and Macintosh computers, gained 79 cents to $174.32.

Lehman Rallies

The S&P 500 Financials Index advanced 1.4 percent, the first gain in three days and the biggest increase among 10 industries. Lehman added 5.1 percent, the most since Aug. 8, to $13.74. Bank of America rose $1.05, or 3.7 percent, to $29.13. AIG had the second-biggest rally in the Dow average, rising 84 cents, or 4.1 percent, to $21.16.

Fannie Mae hasn't asked the U.S. Treasury for help in funding the mortgage-finance company and the government hasn't offered, Mudd told National Public Radio. Fannie Mae is generating a record amount of new business as the private mortgage market is ``gone,'' Mudd said in the interview. He said he expects the company to recover from its recent losses.

Fannie Mae retreated 66 cents to $5.35. Freddie Mac slumped 49 cents to $3.68.

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.