Aug. 2 (Bloomberg) -- U.S. stocks rose as Transocean Inc. became the latest company to report second-quarter earnings that topped estimates, spurring optimism higher share prices are warranted given the outlook for profits.

Transocean, the world's largest offshore oil and natural- gas driller, led an advance in energy shares. Maxim Integrated Products Inc., which said sales this quarter may exceed analysts' predictions, lifted semiconductor makers.

``Earnings growth has been strong,'' said Michael Odlum, chief investment officer at Security Benefit Group, which manages $14.5 billion in Topeka, Kansas. ``The backdrop is positive for stocks over the next six months because I think the economy will continue to surprise and exasperate economists who are still expecting it to weaken.''

The Standard & Poor's 500 Index added 6.03, or 0.5 percent, to 1241.38 as of 11:16 a.m. in New York. The Dow Jones Industrial Average gained 53.58, or 0.5 percent, to 10,676.73 and the Nasdaq Composite Index rose 13.66, or 0.6 percent, to 2209.04.

Stocks also advanced as oil prices retreated from a record and government reports showed growth in personal incomes and factory orders. Crude oil for September delivery, which reached an all-time high of $62.30 a barrel yesterday, slipped 0.4 percent to $61.34 in New York.

Seven stocks were up for every four that fell on the New York Stock Exchange. Some 501 million shares changed hands on the Big Board, 4 percent more than the same time a week ago.

Transocean, Energy Shares

Transocean added $1.23 to $59.12. Profit, excluding some items, was 38 cents a share on sales of $727.4 million. Analysts expected 33 cents on revenue of $696.4 million, according to the average estimates in a Thomson Financial survey.

A gauge of energy companies contributed the most to the S&P 500's advance among 24 industry groups, climbing 0.9 percent.

Chevron Corp., the No. 2 U.S. oil company, increased 75 cents to $59.18. China's Cnooc Ltd. dropped an $18.5 billion takeover of Unocal Corp., leaving Chevron as the sole bidder for the U.S. oil and gas producer. Chevron's $17.3 billion cash-and- stock offer was backed yesterday by Institutional Shareholder Services, the biggest adviser to fund managers on merger votes.

Cnooc's U.S. shares jumped $4.04 to $73.38. Unocal slipped 19 cents to $64.18.

Maxim Jumps

Maxim, a maker of semiconductors for consumer electronics, jumped $3.23 to $45.24. The company said first-quarter sales will be ``at least 4 percent higher'' than the previous period. That translates into sales of about $416.4 million, exceeding the $412.6 million average estimate of analysts surveyed by Thomson.

Maxim's forecast helped give all 19 members of the Philadelphia Semiconductor Index a boost. The measure gained 2.1 percent.

Twenty companies in the S&P 500 are scheduled to release quarterly results today. Of the 381 companies in the benchmark that reported as of yesterday, 70 percent beat analysts' estimates. S&P 500 members have posted second-quarter profit growth of 14 percent, according to a Bloomberg analysis of Thomson data.

``There's potential for stocks to rise further,'' said Jacques Porta, a fund manager at Ofivalmo Patrimoine in Paris, which oversees $180 million in stocks. ``We haven't been disappointed by earnings.''

Personal Spending

A Commerce Department report showed personal incomes rose 0.5 percent in June after a 0.2 increase the previous month. Economists expected a 0.4 percent gain. Spending jumped 0.8 percent, matching economists' estimates and following no change in May.

The report's price gauge tied to spending patterns and excluding food and energy costs, Federal Reserve policy makers' preferred measure for tracking inflation, was unchanged. Economists forecast core prices would increase 0.1 percent.

Factory orders climbed for a fourth month in June, rising 1 percent. That matched the median economist estimate in a Bloomberg survey.

Kinder Morgan Inc., which operates about 35,000 miles of U.S. pipelines, was the S&P 500's best performer after saying late yesterday that it agreed to buy Terasen Inc. for $3.1 billion. Its shares soared $6.80, or 7.7 percent, to $95.40.

H&R Block Inc., the largest U.S. tax-preparation company, gained 75 cents to $57.35 after agreeing to buy an accounting and business-services unit from American Express Co. for $220 million to increase services to medium-size businesses. American Express, the No. 4 U.S. credit-card issuer, added 46 cents to $55.29.

Comcast

Comcast Corp. advanced 50 cents to $31.11. The world's biggest cable-television company said second-quarter net income rose to 19 cents a share from 12 cents a year earlier. Sales increased to $5.6 billion, more than the $5.53 billion average estimate of analysts surveyed by Thomson.

DaimlerChrysler AG climbed $1.17 to $50.54. The carmaker will rework manufacturing processes at Chrysler plants in the U.S., with the aim of cutting costs by billions of dollars, the Wall Street Journal reported, citing Frank Ewasyshyn, the senior vice president of manufacturing.

Other automakers advanced ahead of sales reports for July. General Motors Corp., the world's largest carmaker, gained 22 cents to $37.08. Ford Motor Co., the No. 2 U.S. automaker, added 8 cents to $10.93.

Gen-Probe Surges

Gen-Probe Inc. surged $4.35 to $48.55. The maker of products used to diagnose disease and screen blood raised its full-year profit forecast to $1.20 to $1.24 a share from a May prediction of $1.17 to $1.22.

United Therapeutics Corp. jumped $9.30 to $63.35. The drugmaker submitted successful interim study results of its Remodulin drug to the U.S. Food and Drug Administration and has

Eli Lilly and Co. lost 84 cents to $55.85 and was the second-biggest drag on the S&P 500 after Tyco International Ltd. Lilly, the maker of the world's top-selling schizophrenia drug, said it won't seek U.S. approval to use its Arxxant drug to treat nerve damage in diabetics after two studies showed the treatment wasn't effective for that use.

Tyco slumped $2.87 to $27.95. The world's biggest maker of electronic connectors expects 2005 per-share profit, excluding some items, of $1.85 to $1.87, down from an earlier forecast of $1.88 to $1.93.

Career Education Corp. retreated $2.12 to $37. The second- largest U.S. chain of for-profit colleges had second-quarter revenue was $497.5 million, less than the estimate of $500.9 million in a Thomson survey.

Adobe Systems Inc. slid $1.11 to $28.35. The largest maker of graphic-design software reiterated its third-quarter forecasts, disappointing some investors. Profit will be 25 cents to 27 cents a share on sales of $470 million to $490 million, Adobe said. Analysts predicted per-share earnings of 27 cents on sales of $486.2 million, according to Thomson.

To contact the reporter on this story: Dune Lawrence in New York at dlawrenc6@bloomberg.net.

Last Updated: August 2, 2005 11:18 EDT