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* HP surges after earnings, outlook
* S&P on pace for first weekly loss of year
* Indexes up: Dow 0.45 pct, S&P 0.52 pct, Nasdaq 0.59 pct
By Chuck Mikolajczak
NEW YORK, Feb 22 (Reuters) - U.S. stocks advanced on Friday, rebounding after two days of losses, led by gains in technology stocks after better-than-expected earnings from Hewlett-Packard.
The benchmark S&P 500 has shed 1.9 percent over the past two sessions, its worst two-day drop since early November, putting the index on pace for its first weekly decline of the year. The retreat was triggered by minutes from the Federal Reserve's January meeting released earlier in the week which suggested stimulus measures may end earlier than thought.
Still, the index is up nearly 6 percent for the year and managed to hold the 1,500 support level, despite the recent declines.
"When you get a move like that, you are bound to see a pause and the Fed minutes is a good enough reason to at least reassess," said Michael Marrale, head of research sales and trading at ITG in New York.
"But if, in fact, things do heat up a bit (in the economy), ultimately we are going to see rates go higher and ultimately, that will take money out of bonds and into equities, which is a major backstop for equities."
Hewlett-Packard Co jumped 8 percent to $18.48 as the top boost on both the Dow and S&P 500 after the No. 1 PC maker's quarterly revenue and forecasts beat analysts' expectations as it continued to cut costs under CEO Meg Whitman's turnaround plan. The S&P technology sector was up 0.4 percent.
The Dow Jones industrial average rose 62.07 points, or 0.45 percent, at 13,942.69. The Standard & Poor's 500 Index gained 7.85 points, or 0.52 percent, at 1,510.27. The Nasdaq Composite Index added 18.59 points, or 0.59 percent, at 3,150.08.
Also buoying tech stocks were gains in semiconductor companies Marvell Technology Group Ltd, up 1.6 percent at $9.63, and Texas Instruments Inc, up 3.6 percent at $33.65. The PHLX semiconductor index gained 1.3 percent.
Marvell forecast results this quarter that were largely above analysts' expectations as it gained market share in the hard-disk drive and flash-storage businesses.
Fellow chipmaker Texas Instruments raised its quarterly dividend by a third and said it would buy back an additional $5 billion in stock.
Abercrombie & Fitch dropped 5 percent to $46.57 after the clothing retailer reported a drop in fourth-quarter comparable sales, even as its latest quarterly earnings topped estimates.
Insurer American International Group Inc posted fourth-quarter results that beat analysts' expectations. Shares advanced 4 percent to $38.78.
According to Thomson Reuters data through Thursday morning, of 427 companies in the S&P 500 that have reported results, 69.3 percent have exceeded analysts' expectations, compared with a 62 percent average since 1994 and 65 percent over the past four quarters.
Fourth-quarter earnings for S&P 500 companies are estimated to have risen 5.9 percent, according to the data, above a 1.9 percent forecast at the start of the earnings season.