Nov. 12 (Bloomberg) -- U.S. stocks fell from a 13-month high as energy producers slumped following bigger-than-estimated growth in oil stockpiles, erasing an earlier advance triggered by Hewlett-Packard Co.’s takeover of 3Com Corp. Southwestern Energy Corp. and Range Resources Corp. slid more than 4 percent, leading declines in 39 of 40 energy companies in the Standard & Poor’s 500 Index as oil tumbled as much as 3.2 percent. 3Com rallied 31 percent for its best gain since 2007 as Hewlett-Packard offered to purchase the maker of computer networking equipment for $2.7 billion. The S&P 500 slid 0.6 percent to 1,092.15 at 11:54 a.m. in New York after climbing to as high as 1,101.97 before the Energy Department’s report. The Dow Jones Industrial Average lost 56.53 points, or 0.6 percent, to 10,234.73. About four stocks retreated for each that rose on the New York Stock Exchange. “The fundamentals just aren’t quite there yet,” said Sarah Hunt, a money manager who helps oversee about $6.5 billion for Purchase New York-based Alpine Mutual Funds. “You still have a lot of concerns about the demand side of the equation for energy stocks. We’re getting a bit of a pause. Every time we get these big bursts of enthusiasm they tend to be tempered by the fact that the economy still looks pretty bad.” The S&P 500, which closed at a 13-month high yesterday, failed to remain above the 1,100 level for a second straight day. The index has rebounded 61 percent from a 12-year low in March, recovering almost half of its plunge from a record in October 2007. The rally occurred as government stimulus measures and Federal Reserve interest rate cuts helped end a four-quarter contraction in the U.S. economy. The gains pushed the S&P 500 to 22 times reported earnings, the highest since 2002, according to weekly data compiled by Bloomberg. ‘Slow and Bumpy’ Stock-index futures fell before the open of U.S. exchanges after China’s Premier Wen Jiabao spurred concern that the global economic recovery will be slow. “The worst is over,” Wen said in speech televised from a forum in Beijing. “The global economy is starting to recover but a total recovery will be a slow and bumpy process.” Southwestern Energy, the only oil and natural-gas producer in the S&P 500 to advance last year, slid 4.7 percent to $42.58. Range Resources, the independent energy producer that operates mostly in the southwestern, Appalachian and Gulf Coast regions of the U.S., slid 4.1 percent to $49.09. Energy shares slumped 1.6 percent collectively, the steepest decline among 10 groups. Crude Slumps Oil for December delivery fell 3 percent to $76.87 a barrel in New York. Supplies of crude rose 1.76 million barrels to 337.7 million last week, the Energy Department report showed. Analysts surveyed by Bloomberg News forecast a 1 million-barrel gain. Refinery operations declined to the lowest level since September 2008, when units were shut in the aftermath of hurricanes Gustav and Ike. 3Com surged 32 percent to $7.49 after the Hewlett-Packard bid. Hewlett-Packard Chief Executive Officer Mark Hurd is seeking to add to the company’s $118 billion in annual sales after the sharpest slump in PC demand in history. Hewlett- Packard slid 0.6 percent to $49.71. Brocade Communications Systems Inc. dropped 12 percent to $8.12 after rating cuts at Piper Jaffray Cos., ThinkEquity LLC and Lazard Capital Markets Ltd. Analysts cited a lost potential partnership with Hewlett-Packard, which investors had speculated would buy Brocade. Wal-Mart Earnings Wal-Mart Stores Inc. rose 1 percent to $53.50. The world’s largest retailer posted third-quarter profit of 84 cents a share, beating the 81 cents average analyst estimate in a Bloomberg survey. Dow Chemical Co. climbed 6.1 percent to $28.35 after it said cost cuts and rising sales after the acquisition of Rohm & Haas Co. will boost earnings more than analysts estimate. Eighty-one percent of S&P 500 companies that released results have exceeded the average analyst estimate for third quarter earnings per share, a record in Bloomberg data going back to 1993, even as profits slumped for a record ninth straight quarter. Global equities will rise as much as 30 percent in the next six months on higher earnings and continued economic recovery, according to Burkhard Varnholt, Zurich-based chief investment officer at Bank Sarasin & Co., which manages about $80 billion. U.S. Treasury Secretary Timothy Geithner said there are “early signs” that the world is addressing imbalances in spending and savings that contributed to the global crisis. ‘Leading the World’ Asia is “leading the world” back to recovery, Geithner told reporters in a joint press briefing with counterparts from the Asia-Pacific Economic Cooperation group following a meeting in Singapore today. American exports are also growing at a healthier rate, he said. China will probably let the yuan start rising against the dollar in early 2010 after the central bank signaled it may pursue a more flexible currency policy, said Calyon, the investment-banking arm of Credit Agricole SA. The exchange rate will be guided in a “proactive, controlled and gradual manner and based on international capital flows and movements in major currencies,” the People’s Bank of China said yesterday in a quarterly report. It omitted a pledge made three months earlier to keep the yuan “basically stable.” To contact the reporter on this story: Mary Childs in New York at mchilds4@bloomberg.net.

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