By Nikolaj Gammeltoft Feb. 22 (Bloomberg) -- U.S. stocks fluctuated as commodity producers fell amid declines in industrial metal prices, while banks gained on speculation the Federal Reserve will signal plans to leave its benchmark interest rate at a record low. Exxon Mobil Corp. and Newmont Mining Corp. declined as natural gas and copper prices fell at least 1.4 percent. Wells Fargo & Co. and Bank of America Corp. led financial shares higher. Smith International Inc. rallied 5.7 percent after Schlumberger Ltd. said it will pay $11 billion for the energy company. The Standard & Poor’s 500 Index slipped 0.3 percent to 1,106.39 at 10:01 a.m. in New York after gaining 0.3 percent earlier. Dow Jones Industrial Average lost 20.25 points, or 0.2 percent, to 10,382.1. Fed Chairman Ben S. Bernanke may tell Congress this week that an interest rate increase isn’t imminent amid a weak jobs market, said Ethan Harris, head of economics for North America at Bank of America Merrill Lynch. New York Fed President William Dudley said on Feb. 19 that policy makers need to focus on growth rather than inflation, citing a smaller-than-forecast increase in the consumer-price index for January, a day after the Fed raised its discount rate to 0.75 percent from 0.5 percent. Bernanke will deliver his semi-annual report on the economy and interest rates to House and Senate panels on Feb. 24-25. Fed Bank of San Francisco President Janet Yellen is scheduled to speak today on the U.S. economy in San Francisco. Economy Watch Reports this week may show improvements in the world’s largest economy, economists said. Sales of new U.S. homes rose 3.5 percent in January, following a 7.6 percent decline in December, according to the median forecast in a Bloomberg News survey of economists before the Commerce Department report on Feb. 24. Bookings for goods meant to last several years rose 1.5 percent last month, a separate survey showed before the data’s release on Feb. 25. U.S. stocks will probably fall this year from last year, and the government and central bank will act to spur growth in case of a decline beyond 20 percent, said Marc Faber, the publisher of the Gloom, Boom & Doom Report. Faber advised investors to buy U.S. stocks on March 9, 2009, when the S&P 500 reached its lowest level since 1996. The measure subsequently rallied as much as 70 percent. “I would look at the market to close probably a bit lower than it started the year in 2010,” Faber said today in an interview before a speech at the CLSA Japan Forum in Tokyo. “Equally, I don’t think we have a huge downside risk. If the Dow and the S&P dropped, say 15-20 percent, in other words the S&P towards 900, I think there would be more stimulus and more quantitative easing.” Smith International climbed 5.7 percent to $39.85. Schlumberger, the world’s largest oilfield-services provider, said the $11 billion purchase of Smith International will broaden service offerings and strengthen its competitive position as advances in drilling technology spur oil and natural gas production. The transaction would be the biggest U.S. merger this year and is Schlumberger’s biggest acquisition, according to Bloomberg data. Schlumberger fell 5.1 percent to $60.67. To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net

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