By Rita Nazareth Dec. 30 (Bloomberg) -- U.S. stocks drifted between gains and losses as lower metal prices dragged down commodity producers, offsetting a report showing that companies expanded more than anticipated in December. Barrick Gold Corp. retreated as a stronger dollar weighed on gold prices. Apple Inc. rallied 1 percent to lead technology companies to the biggest advance among 10 industries after Kaufman Bros. LP lifted its share-price estimate. Benchmark indexes recovered most of an early slump after the Institute for Supply Management-Chicago Inc. said its business barometer rose to 60, the highest level since January 2006. The S&P 500 lost less than 0.1 percent to 1,125.65 as of 10 a.m. in New York. The index is up 25 percent in 2009, poised for its biggest yearly gain since 2003, after plunging 38 percent last year. The Dow Jones Industrial Average was little changed at 10,545.41. Stocks in Europe and Asia retreated. “There’s just a lack of determined buying putting pressure on stocks as we move towards the end of 2009,” said Stanley Nabi, New York-based vice chairman of Silvercrest Asset Management Group, which manages $8 billion. “The Fed might be getting ready to take some action and tighten policy sooner rather than later. That will take some wind out of the stock market.” The S&P 500 has fallen 23 percent since the end of 1999, its first drop for a decade since the 1930s. Including reinvested dividends, investors in the S&P 500 lost 0.9 percent a year since 1999, the first time the index had a decade of negative annualized returns in its history stretching back to 1927, according to data compiled by S&P analyst Howard Silverblatt. Rebound Since March The S&P 500 has rebounded 66 percent from a 12-year low in March after governments around the world enacted stimulus measures and the U.S. lent, spent or guaranteed more than $11 trillion to end the recession. The advance has left the measure trading at almost 25 times its companies’ reported earnings, according to weekly data compiled by Bloomberg. Marc Faber, publisher of the “Gloom, Boom & Doom” newsletter, told CNBC that in the near-term, stocks are “a bit overbought” and U.S. Treasury bonds are “oversold.” Investors locking in gains from the biggest stocks rally in seven decades pushed options trading in the U.S. to a seventh straight annual record. The number of options on stocks, indexes and exchange-traded funds that changed hands in 2009 reached 3.59 billion contracts, topping the previous high of 3.58 billion set in 2008, Options Clearing Corp. said yesterday. OCC settles all transactions involving exchange-listed contracts. VIX Retreats The VIX, as the Chicago Board Options Exchange Volatility Index is known, has tumbled 75 percent to 20.01 since soaring to an all-time high of 80.86 in November 2008. It measures the cost of using options as insurance against declines in the S&P 500. Barrick Gold dropped 1.2 percent to $39.25. Exxon Mobil lost 0.3 percent to $68.66. Gold fell on speculation U.S. economic growth will curb demand for the precious metal as an alternative to the U.S. dollar. Crude was little changed at $78.88 a barrel in New York. China BAK Battery Inc. slumped 20 percent to $2.93. Chief Financial Officer Tony Shen said the unprofitable Chinese company hasn’t won any orders from Google Inc., denying speculation that drove the shares up 63 percent yesterday. The stock has more than doubled this year. Companies in the U.S. probably expanded in December for a third consecutive month as they strove to maintain inventories in the face of improving sales, economists said before a report at 9:45 a.m. New York time. The Institute for Supply Management- Chicago Inc. business barometer may have eased to 55.1 from a one-year high of 56.1 in November, according to the median estimate of 53 economists surveyed by Bloomberg News. To contact the reporter on this story: Rita Nazareth in Sao Paulo at rnazareth@bloomberg.net.

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