Aug. 3 (Bloomberg) -- U.S. stocks were little changed as oil prices retreated from a record, enabling the market to rebound from losses triggered from a private report that showed weaker-than-expected growth in the service economy.

Time Warner Inc., the world's largest media company, declined after the company posted profit that missed analysts' estimates. Reebok International Ltd., the No. 2 U.S. athletic- shoe maker, surged on a takeover by Adidas-Salomon AG.

The Standard & Poor's 500 Index slipped 0.72, or 0.1 percent, to 1243.40 as of 11:43 a.m. in New York. The Dow Jones Industrial Average dropped 16.88, or 0.2 percent, to 10,666.86. The Nasdaq Composite Index retreated 4.98, or 0.2 percent, to 2213.17. The S&P 500 and Nasdaq hit four-year highs yesterday.

Stocks are ``coming off a nice July where so much economic data beat'' estimates, said Scott Martin who helps manage $100 million at Astor Asset Management in Chicago. ``The market would have hoped to have seen'' a bigger expansion in the services economy.

Three stocks fell for every two that rose on the New York Stock Exchange. Some 549 million shares changed hands on the Big Board, in line with the same time a week ago.

The Institute for Supply Management's measure of financial services, retail trade and other non-manufacturing business declined to 60.5 in July from 62.2 the previous month. Economists expected a reading of 61.5 in a Bloomberg News survey. Measures of 50 or greater signify growth.

Crude for September delivery increased as much as 1 percent to a record $62.50 a barrel in New York and was last at $61.75.

Time Warner

Time Warner lost 31 cents to $17.11 and was the biggest drag on the S&P 500. The company agreed to pay $2.4 billion to settle lawsuits related to its America Online unit, resulting in Time Warner's first loss since 2002. Second-quarter profit, excluding some costs, was 18 cents a share, less than the average analyst estimate of 19 cents in a Thomson Financial survey.

Reebok jumped $12.99, or 30 percent, to $56.94 for the best performance in the S&P 500. Adidas, the world's No. 2 sporting- goods maker, agreed to pay $3.8 billion, or $59 a share, to gain business in North America and narrow the gap with Nike Inc.

Cigna Corp., the fourth-largest U.S. health insurance provider, and Duke Energy Corp., the No. 1 U.S. utility owner, are among companies that reported quarterly results today.

Cigna said second-quarter operating profit, excluding some items, was $1.98 a share, more than the $1.55 analysts expected in a Thomson survey. The company said 2005 profit, on the same basis, will be $7 to $7.40 a share. Analysts expected $7, according to Thomson. Cigna gained $6.33 to $114.72.

Duke Energy dropped 31 cents to $29.45. Excluding some items, second-quarter profit was 30 cents a share, the company said. Analysts expected 38 cents, according to a Thomson survey.

Aon Gains

Aon Corp. added $3.71 to $29.27. The world's No. 2 insurance broker said second-quarter profit rose to 57 cents a share, exceeding the 48-cent analyst estimate in a Thomson poll.

Technology companies Brocade Communications Systems Inc. and Analog Devices Inc. slumped after third-quarter results were less than expected.

Brocade dropped 71 cents to $3.78. The world's largest maker of switches for data-storage networks had an unexpected third-quarter net loss of 3 cents to 4 cents a share on sales of $121 million to $122 million. Brocade had forecast earnings of as much as 6 cents a share on sales of up to $145 million.

Analog Devices lost $1.77 to $38.95. The world's No. 4 maker of digital signal processors that run mobile phones said fiscal third-quarter profit and sales fell short of its highest forecasts on weaker-than-expected demand from Asian customers.

Cephalon

Cephalon Inc., the maker of the sleep-disorder drug Provigil, retreated 64 cents to $43.20. The company forecast 2005 earnings, excluding some items, of as much as $2.85 a share, 10 cents less than its prior forecast.

Protein Design Labs Inc., a developer of treatments based on immune-system proteins called antibodies, gained $2.89 to $26.19. Biogen Idec Inc. agreed to pay Protein Design as much as $800 million for an MS drug and two other experimental products.

BMC Software Inc. rallied $1.38 to $20.20. The maker of programs that manage corporate networks said it expects a fiscal 2006 profit, excluding some costs, of 90 cents to 96 cents a share, up from an earlier forecast of 86 cents to 92 cents.

NetEase Inc., a Chinese company that makes the online games Fantasy Westward Journey and Westward Journey Online II, surged $12.49 to $72.19. The company said second-quarter profit more than doubled, beating the average analyst estimate from Thomson.

Other Chinese Internet-related companies climbed. Sina Corp., the operator of China's most popular Internet search engine, rallied $1.12 to $29.04. American shares of Shanda Interactive Entertainment Ltd., a Chinese provider of Internet games, jumped $1.69 to $34.50.

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

Last Updated: August 3, 2005 11:44 EDT