Sept. 8 (Bloomberg) -- U.S. stocks rebounded from two days of losses as oil fell to a five-month low and a Federal Reserve policy maker signaled the central bank is in no hurry to raise interest rates again.

Wal-Mart Stores Inc., the world's largest retailer, led the advance as the drop in energy costs suggested consumer spending will increase. Technology shares rose on speculation that Texas Instruments Inc., the No. 1 maker of semiconductors for mobile phones, may raise its earnings forecast next week. Stocks had their biggest weekly loss in a month.

Investors will ``start to price in a reacceleration in the economy,'' said Larry Adam, chief investment strategist at Deutsche Bank Alex. Brown in Baltimore, which manages $58 billion. ``The market has come around to what we've been feeling for a while, and that's that the Fed has completed this tightening cycle.''

The Standard & Poor's 500 Index added 4.90, or 0.4 percent, to 1298.92. The Dow Jones Industrial Average rose 60.67, or 0.5 percent, to 11,392.11. The Nasdaq Composite Index gained 10.50, or 0.5 percent, to 2165.79.

Lennar Corp., the second-largest U.S. homebuilder by market value, declined after reporting quarterly profit dropped for the first time in six years.

Weekly Decline

Stocks fell for the week as builders' earnings showed a housing slump is deepening and economic reports pointed toward accelerating inflation.

The S&P 500 dropped 0.9 percent since last Friday, the biggest decline since the period ended Aug. 11. The Dow average lost 0.6 percent and the Nasdaq retreated 1.3 percent.

Investors gained renewed confidence in the interest-rate outlook today following Cleveland Federal Reserve Bank President Sandra Pianalto's comments.

Pianalto, a member of the rate-setting Federal Open Market Committee, said the full effect of past increases has yet to take hold and last month's pause was ``appropriate.'' The Fed ended a two-year series of rate increases on Aug. 8 when policy makers decided to hold the benchmark at 5.25 percent.

Her views appear to concur with those of San Francisco Fed President Janet Yellen, who yesterday said the central bank needs time to assess the impact of past rate increases.

A Bloomberg News survey of economists shows that the faltering property market may lead to an end of rate rises through the first half of next year because housing's slowdown will be more of a drag on growth than expected, economists said.

Gross domestic product is expected to expand at an average rate of 2.7 percent in the first half of 2007, down slightly from last month's survey as economists shaved a 10th of a point off their second-quarter forecasts.

Wal-Mart

Wal-Mart gained $1.18 to $46.72. Its 2.6 percent rally was the second-biggest in the Dow average. Target Corp., the No. 2 U.S. discount merchant, added $1.88 to $50.56. An S&P 500 measure of retailers rose 1.2 percent.

Crude oil plunged 1.6 percent to $66.25 a barrel in New York on speculation U.S. fuel inventories will be sufficient as economic growth in the world's biggest energy consumer slows. That's the lowest close since April 4.

Texas Instruments added 50 cents to $31. The company will update its third-quarter sales and profit forecast following the Sept. 11 market close.

The last time Texas Instruments offered a quarterly update, on June 8, it raised its sales and profit forecasts due to strong demand for handsets in India and China.

Lennar

Lennar fell 54 cents to $42.71 after the homebuilder became the fourth such company this week to report lower earnings or cut its forecast. Third-quarter profit was as much as $1.35 a share, below the $1.81 average estimate of analysts in a Thomson Financial survey. Lennar said preliminary net new orders slid 5 percent in the quarter.

About three stocks rose for every two that dropped on the New York Stock Exchange. Some 1.31 billion shares changed hands on the Big Board, 16 percent less than the three-month daily average.

A measure of computer-related companies advanced 1.1 percent for the best performance among 10 industry groups. For the year, technology shares have lost 2.9 percent, the only decline among the 10 S&P 500 groups.

International Business Machines Corp., the biggest computer-services provider, gained $1.26 to $80.66.

Microsoft Corp. added 17 cents to $25.60. The software maker plans to sell a cheaper version of its Xbox 360 game console in Japan from Nov. 2, a week before Sony Corp. releases its rival PlayStation 3, to boost sales during the Christmas season.

Gateway

Gateway Inc. gained 3 cents to $1.89. The No. 3 U.S. personal-computer maker named J. Edward Coleman chief executive officer, ending a nine-month search to replace Wayne Inouye.

Amazon.com Inc. jumped 78 cents to $30.51. The world's largest online retailer unveiled a service that will sell movies and television shows from 30 studios and networks. It will compete with Apple Computer Inc.

Shares of technology companies may have benefited from lower oil prices, said Wayne Wilbanks, who helps manage $1.1 billion as chief investment officer of Wilbanks Smith & Thomas Asset Management.

Looking Toward Technology

Investors looking for stocks with above-average returns buy computer-related shares when ``you've got the potential bloom coming off the energy sector,'' said the Norfolk, Virginia-based Wilbanks. ``If you're a high-growth investor, you're naturally going to look to tech.''

Not all computer-related stocks gained.

Broadcom Corp. declined 34 cents to $26.09. The maker of chips for consumer devices discovered more instances of stock- option backdating that will require it to at least double its charges for the practice to $1.5 billion.

Shares of energy producers dropped 1.9 percent for the only decline among 10 industry groups in the S&P 500.

Exxon Mobil Corp., the world's biggest oil company, lost 88 cents to $66.81. Sunoco Inc., the largest refiner in the U.S. northeast, dropped $2.22 to $65.50.

Equifax Inc. jumped $3.92, or 12 percent, to $36.34 for the biggest advance in the S&P 500. The consumer-credit information company raised its profit estimate for this year to more than $2 a share, higher than its projection of as much as $1.99. The company also lowered its forecast for capital expenditures.

Ford Motor Co. rose 19 cents to $8.77, after Mazda Motor Corp., which is a third owned by the second-largest automaker, said it is raising production capacity of engines on increased demand. UBS AG said it now expects Ford shares to reach $9 within 12 months, up from $7.

Ford, Borders

The company also said it will pay at least $20.5 million to new Chief Executive Officer Alan Mulally in the first year.

Borders Group Inc., the second-largest U.S. bookstore chain, climbed $1.38 to $20.60 after Credit Suisse upgraded the stock to ``outperform'' on confidence in new CEO George Jones.

S&P 500 shares, called Spiders, rose 37 cents to $130.28. Nasdaq-100 tracking shares, known by their QQQQ symbol, gained 24 cents to $38.72.

S&P 500 futures expiring in September rose 3.1 to 1310.50 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures advanced 2.75 to 1589.50.

The Russell 2000 Index, a benchmark for companies with a median market value of $612 million, added 0.3 percent to 708.54. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, gained 42.33, or 0.3 percent, to 12,977.52. Based on its increase, the value of stocks rose by $52.9 billion.

Amazon.com Inc. (AMZN US)
Broadcom Corp. (BRCM US)
Equifax Inc. (EFX US)
Exxon Mobil Corp. (XOM US)
Ford Motor Co. (F US)
Gateway Inc. (GTW US)
International Business Machines Corp. (IBM US)
Lennar Corp. (LEN US)
Microsoft Corp. (MSFT US)
National Semiconductor Corp. (NSM US)
Sunoco Inc. (SUN US)
Texas Instruments Inc. (TXN US)
Wal-Mart Stores Inc. (WMT US)

To contact the reporter on this story: Hilary Johnson in New York at hjohnson10@bloomberg.net.

Last Updated: September 8, 2006 18:01 EDT