Feb. 6 (Bloomberg) -- U.S. stocks eked out gains as acquisitions in the banking and insurance industries lifted shares of financial companies.

MGIC Investment Corp., the largest U.S. mortgage insurer, rose the most in the Standard & Poor's 500 Index after agreeing to buy smaller rival Radian Group Inc. for $4.9 billion. State Street Corp., which yesterday announced a $4.5 billion purchase, climbed as Morgan Stanley said the deal may boost sales growth.

The advance was limited by technology stocks, which fell for a second day after Eastman Kodak Co. said it would sell printers to compete with Hewlett-Packard Co., the biggest personal computer maker. A reduced sales forecast by National Semiconductor Corp. sent shares of chipmakers lower.

``We still see a positive year for 2007, but maybe more of a moderating type of return than we saw last year,'' said Paul Alan Davis, who helps manage $7 billion at Charles Schwab & Co. in San Francisco.

The S&P 500 added 1.01, or 0.1 percent, to 1448, its fifth advance in six days. The Dow Jones Industrial Average rose 4.57 to 12,666.31. The Nasdaq Composite Index increased 0.89 to 2471.49.

Both the S&P 500 and the Nasdaq yesterday fell as a report showed growth in service industries picked up more than expected, reviving concern the economic expansion will stoke inflation.

MGIC, State Street

MGIC jumped $7.16, or 11 percent, to $70.09. The private mortgage insurer agreed to buy Radian for stock as the market for protection against home-loan defaults stagnates.

MGIC will exchange 0.9658 share of its stock for each share of Radian, paying no premium to Radian's $61.28 closing price on Feb. 2, the two companies said. Shares of Radian increased $5.67 to $66.51 today.

MGIC and Radian said they may lose about $12 billion in insured mortgages by 2008. PMI Group Inc., the second-biggest mortgage insurer, gained $2.41 to a record $50.09. Triad Guaranty Inc., a smaller rival, added $2.79 to $53.50.

Hewlett-Packard dropped the most in the Dow average, sliding 80 cents, or 1.9 percent, to $42.01. Kodak, the world's biggest photography company, plans to sell printers that use color ink cartridges priced at about $15, or half the cost of some competitors, analysts said. Kodak gained 43 cents to $26.69.

National Semiconductor, whose chips extend battery life in mobile phones, tumbled 64 cents to $22.68 after cutting its sales forecast for a third straight quarter. Sales will fall 14 to 15 percent this quarter from the previous quarter because of slowing orders from Asia, compared with an earlier forecast of an 8 to 11 percent decline.

Texas Instruments Inc., the world's biggest maker of processors for mobile phones, declined 37 cents to $31.22. Maxim Integrated Products Inc., which also makes chips in mobile phones, dropped 72 cents to $31.70.

`Not There Yet'

``We're not seeing a big move upward in orders in tech generally, and certainly not in the semiconductor business,'' said Giles Knight, who helps manage $40 billion at NWD Investments in West Conshohocken, Pennsylvania. ``Investors want to see that their business is starting to pick up and we're not there yet.''

Cisco Systems Inc. added $1.29 to $28.57 in extended trading after the world's biggest maker of computer networking equipment reported profit that topped analysts' estimates. Sales in the current quarter will rise 19 to 20 percent, Chief Executive Officer John Chambers forecast. Analysts anticipated a 17 percent gain. Cisco fell 23 cents to $27.28 in regular trading.

Nasdaq-100 futures expiring in March jumped as much as 8.25 after the close of U.S. exchanges, pointing to a gain in U.S. stocks when trading resumes tomorrow.

Among other technology shares, Nvidia Corp. advanced $1.15 to $33.52. JPMorgan raised its recommendation for the third- largest maker of graphics chips for computers to ``overweight'' from ``neutral.''

Utilities

Utilities extended their rally to a sixth day, pushing the Dow Jones Utilities Average to a record, as they stand to benefit from President George W. Bush's proposed budget, announced yesterday.

The budget includes $9 billion in loan guarantees supporting a mandate to use more renewable fuels and lower emissions. Large power plants, including nuclear and coal-fired power plants, would get $4 billion, as would biofuel projects. Bush also allocated $1 billion for renewable power supplies and new power transmission technologies.

Exelon Corp. added $1.25 to $63.36 after Deutsche Bank Securities Inc. upgraded the largest operator of U.S. nuclear power plants to ``buy'' from ``hold.''

Avon Products Inc. rallied $3.38 to $38. The biggest door- to-door seller of cosmetics posted its first profit increase in six quarters as a gain in overseas sales overshadowed higher advertising spending. Both net income and revenue exceeded analysts' estimates.

Stent Makers

Companies that make stents to prop open diseased arteries dropped as the U.S. Medicare program rethinks its blanket coverage for all uses of the device.

Officials may propose limiting payments to patients approved for stents by U.S. regulators, a spokesman said. That would affect coverage for about 60 percent of current users, doctors say, including heart attack survivors, diabetics and other sicker patients who have been linked to higher risks of potentially fatal blood clots in using the devices.

Boston Scientific Corp. fell 58 cents, or 3.2 percent, to $17.50 for the steepest decline in the S&P 500. Johnson & Johnson lost 30 cents to $66.

IAC/InterActiveCorp slid 55 cents to $38.72. The Internet and media company assembled by billionaire Barry Diller said fourth-quarter profit tumbled 98 percent after the company wrote down the value of its entertainment coupon division.

Tyco International Ltd. fell 62 cents to $32.59. The world's biggest maker of electronic connectors and security systems said first-quarter earnings fell 7.6 percent on tax, legal and debt costs to split the conglomerate into three independent companies.

Big Board

Two stocks rose for every one that fell on the New York Stock Exchange. Some 1.47 billion shares changed hands on the Big Board, 3.6 percent less than the three-month daily average.

In other markets, U.S. Treasuries rose for a third straight day after demand for the government's quarterly auction of three- year notes outpaced dealer expectations and the dollar fell against the euro. Oil prices rose as freezing cold covered the eastern half of the U.S., spurring demand for heating fuels.

Crude futures rose 14 cents to close at $58.88 a barrel in New York.

S&P 500 shares, called Spiders, added 4 cents to $144.89. Nasdaq-100 Index tracking shares, known by their QQQQ symbol, fell 7 cents to $44.05.

S&P 500 futures expiring in March lost 0.40 to 1453.30 on the Chicago Mercantile Exchange. Nasdaq-100 futures dropped 2 to 1803.50.

The Russell 2000 Index, a benchmark for companies with a median market value of $680 million, rose 0.5 percent to 810.41. The Dow Jones Wilshire 5000 Total Market Index, the broadest measure of U.S. shares, gained 0.1 percent to 14,589.26. Based on its advance, the value of stocks increased by $24.3 billion.

Avon Products Inc. (AVP US)
Boston Scientific Corp. (BSX US)
Cisco Systems Inc. (CSCO US)
Eastman Kodak Co. (EK US)
Exelon Corp. (EXC US)
Hewlett-Packard Co. (HPQ US)
IAC/InterActiveCorp (IACI US)
Johnson & Johnson (JNJ US)
Maxim Integrated Products Inc. (MXIM US)
MGIC Investment Corp. (MTG US)
National Semiconductor Corp. (NSM US)
Nvidia Corp. (NVDA US)
PMI Group Inc. (PMI US)
Radian Group Inc. (RDN US)
State Street Corp. (STT US)
Texas Instruments Inc. (TXN US)
Triad Guaranty Inc. (TGIC US)
Tyco International Ltd. (TYC US)

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net.

Last Updated: February 6, 2007 17:43 EST