Tech stocks get boost from Apple, Amazon; Traders grapple with concerns about housing, banks

By Tim Paradis, AP
Tuesday, June 22, 2010

Technology stocks pull market to modest gains

NEW YORK — Technology stocks led the market in a modest advance Tuesday as investors struggled to set aside new worries about housing and banks.

The Dow Jones industrial average rose about 15 points in afternoon trading. The technology-dominated Nasdaq composite index led major indicators with a gain of 0.6 percent.

Apple Inc. rose more than 1 percent after it reported that it has sold 3 million of its touchscreen iPad devices in its first 80 days. Meanwhile, Inc. climbed more than 1 percent after traders grew more optimistic about the company following its decision Monday to match a price cut by rival Barnes & Noble Inc. on its electronic reader.

The gain in tech stocks came after a sluggish morning. The National Association of Realtors reported that sales of existing homes fell 2.2 percent in May. The report surprised analysts who thought deals would get a lift from a homebuyer tax credit. Sales fell to a seasonally adjusted annual rate of 5.66 million from a revised 5.79 million in April.

Meanwhile, Fitch Ratings slashed its view on BNP Paribas SA, the largest bank by deposits in the 16 nations that share the euro. That has revived worries that mounting government debt across Europe, particularly in Greece, Spain and Portugal, would lead to new losses for banks holding that debt. Banks around the globe were hit with losses during the credit crisis in late 2008.

The euro resumed its slide against the dollar after rising for eight of the past 10 days. The euro fell to $1.2313.

Stocks’ modest moves and the drop in the euro came as the Federal Reserve began a two-day meeting at which it’s expected to keep its benchmark federal funds rate at its current range of zero to 0.25 percent. The Fed is maintaining low rates because high unemployment and weakness in the housing market have held back an economic rebound. But the slow climb means the Fed doesn’t need to raise rates to contain inflation.

The stock market gave up early gains to end lower Monday. Stocks have pulled off recent lows from early June but traders are still looking for any insight into the pace of the economy’s recovery. Peter Tuz, president of Chase Investment Council in Charlottesville, Va., said trading likely will be choppy until July when companies start to report earnings from April-June quarter.

“It’s kind of like summer doldrums until earnings season,” Tuz said. “Once that begins you start to get clarity.”

In early afternoon trading, the Dow rose 14.28, or 0.1 percent, to 10,456.69. The Standard & Poor’s 500 index rose 0.34, or less than 0.1 percent, to 1,113.54, while the Nasdaq composite index rose 13.22, or 0.6 percent, to 2,302.31.

Bond prices rose Tuesday as investors opted for the safety of U.S. Treasurys. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.21 percent from 3.25 percent late Monday.

A drop in oil and concerns about the prospects for U.S. offshore drilling following the Gulf of Mexico spill hit energy stocks. Crude oil fell 3 cents to $77.79 per barrel on the New York Mercantile Exchange.

Pioneer Natural Resources fell $3.03, or 4.3 percent, to $68, while Southwestern Energy Co. fell $1.09, or 2.5 percent, to $42.67.

Apple rose $5.37, or 2 percent, to $275.54, while Amazon climbed $1.90, or 1.6 percent, to $124.45.

Advancing stocks narrowly outpaced those that fell on the New York Stock Exchange, where volume came to 441 million shares compared with 506 million shares traded at the same point Monday.

The Russell 2000 index of smaller companies rose 1.49, or 0.2 percent, to 661.52.

Britain’s FTSE 100 fell 1 percent, Germany’s DAX index dropped 0.4 percent, and France’s CAC-40 fell 0.8 percent. Japan’s Nikkei stock average fell 1.2 percent.

will not be displayed