April 18 (Bloomberg) -- The Standard & Poor's 500 Index had its first gain in four days and rebounded from its lowest level this year. Financial shares such as Bank of America Corp., whose earnings rose to a record, helped lead the advance.

Shares of energy and raw material producers, such as Exxon Mobil Corp. and U.S. Steel Corp., climbed as investors bought some of this year's best performers.

``This is probably a pretty good buying opportunity,'' said Gus Sauter, chief investment officer at Vanguard Group Inc., which oversees $520 billion in Valley Forge, Pennsylvania. ``The economy is still strong.''

The S&P 500 rose 3.36, or 0.3 percent, to 1145.98. The Nasdaq Composite Index added 4.77, or 0.3 percent, to 1912.92 as Intel Corp. gained before its earnings report tomorrow.

3M Co. declined after the company posted its smallest sales gain in 2 1/2 years, contributing to a drop in the Dow Jones Industrial Average. The Dow average lost 16.26, or 0.2 percent, to 10,071.25 for its fourth consecutive retreat.

Almost three stocks rose for every two that fell on the New York Stock Exchange. Some 1.75 billion shares changed hands on the Big Board, 10 percent more than its three-month daily average.

Gains in the S&P 500 and Nasdaq contrasted with losses in Europe and Asia. The Dow Jones Euro Stoxx 50 Index, a benchmark for the euro zone, erased its gain for the year, with every member falling. Japan's Nikkei 225 Stock Average had its biggest drop in 11 months.

Benchmark Lows

U.S. benchmark indexes closed on April 15 at their lowest since at least Nov. 2. Economic reports showing a drop in consumer confidence and factory production last week added to concerns after disappointing earnings from companies such as International Business Machines Corp. and General Motors Corp.

Earnings reports from Banc of America and 3M gave investors a mixed picture about the prospects for profit growth this year, causing benchmark indexes to bounce between gains and losses throughout the day. First-quarter profits are estimated to rise 8.6 percent for S&P 500 companies, on average, according to analysts in a Thomson Financial poll. Almost 150 companies in the benchmark are expected to report earnings this week.

A gauge of financial companies added 0.8 percent and was the biggest contributor to the S&P 500's gain among 10 industry groups.

Bank of America added 45 cents to $44.73. First-quarter earnings per share from operations were $1.16 a share, more than the 97-cent estimate expected by analysts in a Thomson survey. The bank said first-quarter profit rose 75 percent to $4.7 billion, an all-time high.

JPMorgan Chase & Co. gained 71 cents to $34.64. The second- biggest U.S. bank may be able to increase profitability over the next two years, Banc of America Securities LLC analyst John McDonald wrote in a note. He raised the stock to ``buy'' from ``neutral.''

Energy, Materials

A measure of oil and natural-gas producers increased 1.8 percent, the biggest advance among the S&P 500's 10 industry groups, even as oil prices retreated 12 cents to $50.37 a barrel in New York.

Exxon Mobil Corp., the biggest publicly traded oil company, added $1.06 to $57.25. ConocoPhillips, the third-largest U.S. oil producer, increased $2.60 to $102.67.

U.S. Steel, the biggest steelmaker in the Americas, rebounded $2.33 to $45.24. Rival Nucor Corp. added $2.88, or 5.9 percent, to $51.67 after the company agreed to acquire the assets of Marion Steel Co. Both stocks had dropped at least 15 percent this month amid concern slowing economic growth would curb demand for raw materials.

Energy and raw material had two of the top three gains among 10 industry groups in the S&P 500 last quarter. The S&P 500 Energy and S&P 500 Materials indexes gained 17 percent and 1.3 percent, respectively, compared with a drop of 2.6 percent for the S&P 500.

`Best Opportunity'

Banc of America Securities investment strategist Thomas McManus is betting on a rebound in U.S. stocks. He recommended today investors increase their equity allocation to 60 percent from 55 percent, the first boost in more than two years.

``Friday's close is the best opportunity to invest in stocks in at least a year,'' McManus wrote in a report.

Shares of 3M posted the steepest drop in the Dow average, losing $4.96, or 6.1 percent, to $75.90. The maker of 55,000 products including Scotch tape said sales trailed analysts' estimates and had their smallest increase in 2 1/2 years amid slowing growth in Western Europe and Japan.

Losses in shares of Johnson & Johnson and Altria Corp., which are scheduled to report earnings later this week, also contributed to the Dow industrials' slide.

J&J, the biggest producer of medical devices, fell 36 cents to $69.04. Altria, the parent company of the cigarette maker Philip Morris, declined $1.25 to $63.73.

Semiconductors

A gauge of semiconductor shares climbed 0.8 percent. Intel, which is scheduled to report results tomorrow after the market close, added 9 cents to $22.21. Wells Fargo Securities analyst Tad Lafountain upgraded the stock to ``hold'' from ``sell.''

Applied Materials Inc., the world's largest maker of semiconductor-production equipment, increased 36 cents to $14.86. Deutsche Bank AG analyst Stephen O'Rourke raised the stock to ``buy'' from ``hold.''

Adobe Systems Inc. fell after agreeing to buy Macromedia Inc. for $3.4 billion in stock. Adobe Systems, the largest maker of graphic-design software, lost $5.89, or 9.7 percent, to $54.77, for the steepest drop in the S&P 500. Macromedia, the maker of Dreamweaver and Flash Web-design programs, climbed $3.27 to $36.72.

AstraZeneca Plc's American depositary receipts lost 22 cents to $43.20. The National Cancer Institute halted a study of the company's Iressa drug, which was being studied for lung cancer treatment, according to the agency's Web site.

QQQQs, Futures

The S&P 500 shares, called Spiders, increased 35 cents to $114.50. Nasdaq-100 tracking shares, known by their QQQQ symbol, added 1 cent to $34.75.

S&P 500 futures expiring in June rose 3.20 to 1146.80 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures were unchanged at 1414.50.

The Russell 2000 Index, which tracks companies with a median market value of $523 million, gained 0.8 percent to 585.33. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, advanced 36.80, or 0.3 percent, to 11,281.60. Based on changes in the Wilshire, the value of stocks increased by $44.2 billion.

3M Co. (MMM US)
Adobe Systems Inc. (ADBE US)
Altria Corp. (MO US)
Applied Materials Inc. (AMAT US)
AstraZeneca Plc (AZN US)
Bank of America Corp. (BAC US)
ConocoPhillips (COP US)
Exxon Mobil Corp. (XOM US)
Instinet Group Inc. (INGP US)
Intel Corp. (INTC US)
Johnson & Johnson (JNJ US)
JPMorgan Chase & Co. (JPM US)
Macromedia Inc. (MACR US)
Nasdaq Stock Market Inc. (NDAQ US)
Nucor Corp. (NUE US)
U.S. Steel Corp. (X US)

To contact the reporter on this story: Edgar Ortega in New York at ebarrales@bloomberg.net.

Last Updated: April 18, 2005 17:25 EDT