Dec. 8 (Bloomberg) -- U.S. stocks rose, led by health-care shares after Merck & Co. forecast a smaller 2005 earnings decline than some analysts expected.

``It's time to buy, it's a bottom for the stocks,'' said Ted Parrish, who manages the $136.7-million Henssler Equity Fund in Marietta, Georgia. Concerns about Merck's Vioxx and similar drugs are ``priced in and more. We're overweight in health-care stocks -- we're just waiting for their boat to come in.''

General Electric Co. climbed after Lehman Brothers Inc. raised its opinion on the shares.

The Dow Jones Industrial Average gained 30.97, or 0.3 percent, to 10,471.55 as of 11:27 a.m. in New York. The Standard & Poor's 500 Index added 2.58, or 0.2 percent, to 1179.65. An index of health-care stocks, the worst performer this quarter, had the biggest rise among the benchmark's 10 industry groups.

Declines in computer-related shares weighed on the Nasdaq Composite Index, which rose 4.53, or 0.2 percent, to 2119.19. The shares fell after Texas Instruments Inc. narrowed its fourth- quarter sales forecast.

Five stocks rose for every four that dropped on the New York Stock Exchange. Some 559.4 million shares changed hands on the Big Board, 6.7 percent less than the same time a week ago.

Benchmark indexes pared some of their gains after oil prices rebounded from a four-month low. Crude oil for January delivery rose 2.2 percent to $42.35 a barrel in New York after a government report that U.S. inventories of heating oil and diesel increased less than expected. Futures earlier fell as low as $40.45, a level not seen since July 22.

Merck Advances

Merck gained 68 cents to $28.57. The No. 2 U.S. drugmaker said that profit next year will be $2.42 to $2.52 a share. The lowest estimate in a Thomson Financial survey of analysts was $2.40. Merck said earnings will fall because of a decline in sales of its Zocor cholesterol drug and the loss of revenue from the withdrawn painkiller Vioxx.

Pfizer Inc. added 16 cents to $27.36. Sales of the drugmaker's cholesterol-lowering Lipitor, the world's biggest- selling medication, may rise 15 percent in each of the next five or six years, said Chief Executive Officer Hank McKinnell. Revenue from the drug would more than double to about $21 billion after six years.

Other drugmakers also advanced. Abbott Laboratories, medical products from children's nutritional drinks to HIV tests, increased 60 cents to $44.15. Amgen Inc., the largest biotechnology company, gained $1.29 to $63.24. A measure of drugmakers jumped 1 percent and was the biggest contributor to the benchmark's rise.

General Electric

General Electric, the world's largest company by market value, advanced 52 cents to $35.83 after Lehman raised the shares to ``overweight'' from ``equal weight.'' Earnings from the company's energy and financial businesses will help GE post 15 percent earnings growth the next three years, wrote Lehman analyst Robert Cornell.

Texas Instruments dropped 69 cents to $24.33. The Dallas- based company said after the close of trading that revenue will be $3.02 billion to $3.14 billion, missing an October prediction of $2.96 billion to $3.2 billion, as its industrial semiconductor customers continue to reduce inventory.

``Texas Instruments is one of the bellwether companies in the business because its chips are tied to computers and cell phones,'' said Charles Lieberman, chief investment officer at Advisors Financial Center in Paramus, New Jersey. ``If they are seeing a slowdown, that will harbor badly for the industry.''

National Semiconductor Corp. slipped 16 cents to $16.40 after Banc of America analyst Sumit Dhanda cut the company to ``sell'' from ``neutral.'' The maker of chips that boost battery life in mobile electronics will likely say tomorrow that fiscal second-quarter net income fell to 15 cents a share, the average estimate of 20 analysts, from 17 cents, a year earlier.

Xilinx Inc., the biggest maker of programmable semiconductors, sank 44 cents to $30.81. Its smaller rival Altera Corp. slumped 49 cents to $22.15. Dhanda lowered both shares to ``sell.''

To contact the reporter on this story: Dune Lawrence in New York at dlawrence6@bloomberg.net.

Last Updated: December 8, 2004 11:37 EST