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S&P 500 falls as Apple slump overshadows rally in Dell’s shares

Stock prices were mixed Monday as investors await reports on inflation and home construction later this week.

The Dow Jones Industrial Average gained 18.89 points to 13,507.32. However, the Nasdaq Composite Index dropped 8.13 points to 3,117.50 and the S&P 500 Stock Index was down 1.37 points to 1,470.68.

Federal Reserve Board chairman Ben Bernanke told an audience at the University of Michigan the aggressive bond buying program designed to keep interest rates low and spur the economy will not lead to inflation in coming years. He also stressed the importance of raising the nation's debt ceiling.

Gold rose $8.80 to $1,669.40 an ounce and oil was up 58 cents to $94.14 a barrel.

Apple Inc. (Nasdaq: AAPL), the most valuable company, sank 3.6 percent on reports it curbed iPhone production on weak demand. Sprint Nextel Corp. (NYSE: S) dropped 3.9 percent after the wireless carrier was cut at JPMorgan Chase & Co. (NYSE: JPM). Dell Inc. (Nasdaq: DELL) surged 13 percent as two people with knowledge of the matter said the company is in buyout talks with private-equity firms.

“As Apple goes, so goes the market,” Frank Ingarra, who helps manage $1.4 billion at Greenwich, Conn.-based NorthCoast Asset Management LLC, said. “The problem you run into is that eventually they run out of people to sell stuff to. There’s just not enough people in the world to keep buying all these Apple products. It makes sense that it’s pulling back, and it makes sense that it’s affecting the market because it’s such a large weight.”

Almost 80 percent of the 28 S&P 500 companies which reported quarterly results beat analysts forecasts. Fourth-quarter profits at S&P 500 companies grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.

Research In Motion Ltd. (Nasdaq: RIMM) added 10 percent to $14.95. The maker of the BlackBerry smartphone jumped amid signs that demand for rival Apple’s market-leading iPhone is ebbing.

Scripps Networks Interactive Inc. (NYSE: SNI) slid 1.1 percent to $59.15. The television home of Paula Deen’s mashed potatoes was cut to hold from buy at Deutsche Bank AG (NYSE: DB) by equity analyst Douglas Mitchelson. The 12-month share-price estimate is $65.

H&R Block Inc. (NYSE: HRB) slumped 2.9 percent to $19.41. The biggest U.S. tax preparer was cut to underweight from equalweight at Morgan Stanley (NYSE: MS).

International Business Machines Corp. (NYSE: IBM) dropped 0.9 percent to $192.62. The company was downgraded to neutral from overweight at JPMorgan by equity analyst Mark Moskowitz.

SunPower Corp. (Nasdaq: SPWR) slid 6 percent to $7.70. The solar-panel company majority-owned by Total SA fell after an announcement of higher-than-anticipated restructuring costs and a downgrade by Credit Agricole Securities.

Hewlett Packard Co. (NYSE: HPQ) added 4.9 percent to $16.95. While Lenovo’s sales growth of 8.2 percent from a year earlier was the fastest of the top five computer makers, Hewlett Packard’s dominance in professional PCs helped it retake the lead from Lenovo, market researcher Gartner said in a report Monday. Hewlett-Packard shipped 16.2 percent of PCs last quarter compared with 15.5 percent a year earlier.

Cisco Systems Inc. (Nasdaq: CSCO) gained 2.4 percent to $20.97. The biggest maker of computer networking equipment was raised to outperform at both Robert W. Baird & Co. and William Blair & Co.

Sears Holdings Corp. (Nasdaq: SHLD) rose 8.9 percent to $44.60 after Chairman Edward Lampert disclosed that he increased his stake in the retailer last week after being named chief executive officer.

Harry Winston Diamond Corp. (NYSE: HWD) jumped 4.3 percent to $15.08, the highest level since April. Swatch Group AG, the biggest maker of Swiss timepieces, agreed to buy the Harry Winston watch and jewelry unit for about $1 billion, adding a luxury label in its biggest acquisition.

Herbalife Ltd. (NYSE: HLF) rose 10 percent to $44.08. The shares rallied to the highest price since before hedge-fund manager Bill Ackman called the nutrition company a pyramid scheme and announced he had taken a short position in the shares.

United Parcel Service Inc. (NYSE: UPS) climbed 1.7 percent to $79.24. The company said it scrapped a 5.16 billion-euro ($6.9 billion) bid for TNT Express NV after European regulators moved to block the deal. Separately, the stock was raised to market perform from underperform at Avondale Partners LLC.

Bloomberg News contributed to this report.

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