April 3 (Bloomberg) -- U.S. stocks rose, capping the longest streak of weekly gains since 2007, as Federal Reserve Chairman Ben S. Bernanke said programs to unfreeze credit markets are working and Research In Motion Ltd.’s forecasts boosted technology shares.

The Standard & Poor’s 500 Index recovered from a 0.9 percent morning drop triggered when the government said the unemployment rate climbed to a 25-year high of 8.5 percent. Wells Fargo & Co. added 6.6 percent and Bank of America Corp. climbed 5 percent, helping S&P 500 financial shares reverse a 1.7 percent loss. Research In Motion, maker of the BlackBerry, jumped 21 percent for the top gain in the Nasdaq-100 Index.

The S&P 500 added 1 percent to 842.5 to complete a fourth straight weekly advance, the longest streak since the bear market began in October 2007. The Dow Jones Industrial Average increased 39.51 points, or 0.5 percent, to 8,017.59. Both gauges closed at their highest levels since Feb. 9.

“No matter how you feel about the stimulus package, some of it is going to stick and the economy should stabilize in the second or third quarter,” said Bruce Bittles, the Nashville- based chief investment strategist at Robert W. Baird & Co., which oversees $16 billion. “If that’s going to happen, the market should sniff it out.”

Benchmark indexes turned higher around noon as Bernanke, speaking in Charlotte, North Carolina, hailed a decline in home- loan rates in the wake of the Fed’s purchases of mortgage securities and said the drop may improve the housing market.

VIX Under 40

The VIX, which gauges the cost of using options to protect against losses in the S&P 500, decreased 5.6 percent to close below 40 for the first time since January.

The S&P 500 has surged 25 percent since sinking to a 12- year low of 676.53 on March 9 as banks from Citigroup Inc. to JPMorgan Chase said they made money in the first two months of 2009 and Treasury Secretary Timothy Geithner announced plans to finance as much as $1 trillion in purchases of distressed assets from financial firms.

Research In Motion added $10.20 to $59.29. RIM said yesterday that first-quarter earnings will amount to at least 88 cents a share, compared with the 82-cent estimate in a survey of analysts. Profit margins also are improving as RIM finds new ways to reduce costs for phone hardware, Co-Chief Executive Officer James Balsillie said.

The S&P 500 gained 3.3 percent in the week and the Dow added 3.1 percent, also capping a fourth straight weekly advance.

‘Adjust to the Negative’

Stocks opened lower today after the Labor Department’s employment report for March showed the economy lost 663,000 jobs, bringing the decline since the slump began to about 5.1 million, the worst in the post-World War II era. An Institute for Supply Management report released today showed service industries unexpectedly contracted at a faster pace in March than in February.

“People are starting to adjust to the negative news flow,” said Matt Kaufler, portfolio manager at Federated Clover Investment Advisors, which manages $2 billion in Rochester, New York. “They’re becoming more comfortable that we’re in a very soft economic environment and one with a lot of uncertainty.”

Wells Fargo, the biggest West Coast lender, added 6.6 percent to $16.34. JPMorgan, the largest bank by assets, increased 4 percent to $29.28. Bank of America Corp., the biggest U.S. bank by assets, climbed 5 percent to $7.60 for the biggest gain in the Dow average.

Financials Lead the Way

Financial shares in the S&P 500 climbed 4.2 percent as a group for the top gain among 10 industries.

Kimco Realty Corp. climbed 26 percent to $9.40 for the biggest advance in the S&P 500. The largest U.S. owner of community shopping centers said it raised $623.6 million in a share sale to reduce its debt. Four other real estate companies -- Vornado Realty Trust, Host Hotels & Resorts Inc., Boston Properties Inc. and Simon Property Group Inc. -- were among the 10 biggest gainers in the index.

Intercontinental Exchange Inc. rose 9 percent to $85.27. The second-largest U.S. futures exchange was upgraded to “buy” from “neutral” at Goldman Sachs, which said it has more pricing power than competitors.

Gilead Sciences Inc. gained 5.1 percent to $46.98. The biggest supplier of AIDS drugs in the U.S. said a study found its experimental drug reduced blood pressure in patients who had not responded well to other medications.

Bristol-Myers Slumps

Bristol-Myers Squibb Co. fell 5.4 percent to $20.17 and led health-care shares to the steepest retreat among 10 groups. The drugmaker was cut to “market perform” from “outperform” by Sanford C. Bernstein & Co., which said the company is a less likely target for acquisition by another pharmaceutical company as the stock is expensive relative to earnings.

Humana Inc. led managed care companies in the S&P 500 to a 3.2 percent drop. Insurers that provide government-subsidized care to the elderly may have their earnings reduced by as much as 20 percent from a proposed change in U.S. Medicare Advantage program, Wachovia Corp. said. Humana fell 5.7 percent to $25.46.

Akamai Technologies Inc. slid 6.9 percent to $20.06 for the biggest drop in the S&P 500. The largest supplier of software and services to make Web sites load faster was cut to “hold” from “buy” at Citigroup, which said competition from Limelight Networks Inc. could be a “threat” to Akamai’s commerce business.

Micron Tumbles

Micron Technology Inc. slid 2.8 percent to $4.50. The biggest U.S. producer of computer-memory chips reported a second-quarter adjusted loss of 81 cents a share, wider than the average analyst estimate of 63 cents, as slower demand forced chip prices below the cost of production.

Financial shares have led the S&P 500’s rebound, surging 60 percent collectively since March 6 as Bernanke delivers record- low mortgage rates.

Fixed 30-year mortgage rates fell to a record low for the second consecutive week last week, hitting 4.78 percent, Freddie Mac said yesterday. Home-loan applications in the U.S. rose for the fourth straight week last week as a decline in borrowing costs spurred homeowners to refinance, while purchases of new houses unexpectedly rose in February.

All 10 industry groups in the S&P 500 have climbed at least 9.8 percent since the index hit a 12-year low on March 9, with industrial, raw-materials and so-called consumer discretionary companies rallying more than 31 percent.

The S&P 500 has trimmed its 2009 loss to less than 7 percent from as much as 25 percent. The benchmark index for U.S. stocks slumped 38 percent last year, its worst annual return since the Great Depression, after mounting credit-market losses dragged the nation into a recession.

Earnings for companies in the index decreased 61 percent in the fourth quarter of 2008, according to data compiled by Bloomberg. The first quarter of 2009 is projected to be the ninth straight decline in corporate profits, the longest since the government began tallying quarterly data in 1947.

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net.

Last Updated: April 3, 2009 16:42 EDT