Procter & Gamble Co. climbed 2.9 percent after boosting its dividend, while Dr Pepper Snapple Group Inc. jumped as much as 4.9 percent as Goldman Sachs Group Inc. added the shares to its “conviction buy” list. CSX Corp. rallied 9 percent to lead industrial shares higher after the railroad operator’s earnings topped estimates and a gauge of New York manufacturing was better than expected. Intel Corp. dropped 3.7 percent after the biggest chipmaker said first-quarter profit fell 55 percent.

About two stocks advanced for each that fell on the New York Stock Exchange. The Standard & Poor’s 500 Index rose 0.4 percent to 845.24 at 12:52 p.m. in New York. The Dow Jones Industrial Average increased 63.4 points, or 0.8 percent, to 7,983.58. The Russell 2000 added 0.8 percent and the Nasdaq Composite lost 0.8 percent.

“The end of the world is not nigh, but this is going to be a challenging environment going forward with respect to earnings, economic growth and consumption,” said Stephen Wood, who helps manage $151 billion as senior portfolio strategist at Russell Investments in New York. “We’re definitely getting mixed signals.”

U.S. stocks yesterday halted a three-day advance after the government reported unexpected declines in retail sales and producer prices and Goldman Sachs Group Inc. sold shares to boost capital.

The S&P 500 has rebounded 25 percent from a 12-year low on March 9 as lenders from Citigroup to JPMorgan Chase & Co. 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 financial firms’ distressed assets.

Earnings Season

Companies from Citigroup to General Electric Co. will follow Intel with earnings reports this week. Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression.

P&G, the largest consumer-products company, added $1.38 to $48.63 after boosting its quarterly dividend by 10 percent, one of a shrinking list of S&P 500 companies that have raised their payout for at least 25 straight years.

Dr Pepper Snapple added 30 cents to $19.66 and climbed as high as $20.30 after Goldman Sachs analysts said in a report that “fundamentals are trending even more favorably than we anticipated and valuation is still undemanding.”

CSX climbed $2.55 to $30.94. The third-largest U.S. railroad company reported a first-quarter net profit of $246 million, or 62 cents a shares, exceeding the 51-cent average estimate of 17 analysts surveyed by Bloomberg.

‘Still in the Black’

“Despite all the talk about downsizing and cutbacks, companies are still in the black and making money,” said Peter Sorrentino, who helps manage $13.3 billion at Huntington Asset Management in Cincinnati. “It’s a reason to be optimistic on stocks in general.”

Intel dropped 59 cents to $15.42. Sales of personal- computer processors likely bottomed out in the first quarter after manufacturers worked through their stockpiles of parts, Chief Executive Officer Paul Otellini said. While the worst of the slump is “probably now behind us,” Intel isn’t ready to predict growth this quarter, he added.

Textron Inc. slipped 1.4 percent to $11.24. The planemaker identified as a takeover target by a Kuwaiti newspaper fell for a third day after Citigroup Inc. downgraded the shares to “hold” from “buy” and predicted “bleak” quarterly results at the Cessna and industrial units.

International Paper Rallies

International Paper Co. increased 23 percent to $8.90. The world’s largest maker of cardboard boxes was raised to “buy” from “hold” at Deutsche Bank AG, which cited “very modest valuation along most metrics and hints of a bottom in cyclical challenges.”

Peabody Energy Corp. tumbled 13 percent to $25.55. The largest U.S. coal producer reported first-quarter profit below analysts’ estimates because of slack demand from power plants and steelmakers. The company also trimmed 2009 production estimates.

Manufacturing in the New York region contracted this month the least since September and the outlook for the next six months improved for a second time. The Fed Bank of New York’s general economic index rose to minus 14.7, better than forecast, from minus 38.2 the prior month when it reached its lowest level since data began in 2001, the bank said today.

Cost of Living

The cost of living in the U.S. unexpectedly fell in March, underscoring Federal Reserve forecasts that inflation will be contained in coming months. The consumer price index decreased 0.1 percent compared with a 0.1 percent gain projected in a survey of economists by Bloomberg News, according to figures from the Labor Department.

The benchmark index for U.S. stock options dropped for a second straight day. The VIX, as the Chicago Board Options Exchange Volatility Index is known, fell 1 percent to 37.31. The index, which measures the cost of using options as insurance against declines in the S&P 500, is down from a record 80.86 in November yet still almost double the 20 average over its 19-year history.

 SOURCE: Bloomberg