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Tech stock recovery fades; US stock indexes flip to losses

By The Associated Press
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NEW YORK (AP) — U.S. stock indexes flipped to losses in Tuesday afternoon trading after a recovery for technology stocks lost steam.

After climbing strongly in the morning, tech stocks were hanging on to modest gains by the late afternoon. Telecom stocks, utilities and industrial companies had the market's sharpest losses.

KEEPING SCORE: The Standard & Poor's 500 was down 8 points, or 0.3 percent, at 2,631, as of 3:15 p.m. Eastern time. It's the second straight day where the index started the day with gains only to fade as the afternoon wore on. The S&P 500 had been up as much as 0.3 percent earlier on Tuesday.

The Dow Jones industrial average fell 107, or 0.4 percent, to 24,184, and the Nasdaq composite lost 6, or 0.1 percent, to 6,768.

TECH CLIMBS: Chip makers and internet companies had the market's best gains, and technology stocks in the S&P 500 rose 0.2 percent. It was the only sector of the 11 that make up the index to rise, though tech had been up as much as 1.4 percent earlier in the day.

Micron Technology rose $1.13, or 2.8 percent, to $41.03 for one of the largest gains in the S&P 500.

It's a return to the top of the leaderboard for tech stocks, which have been this year's biggest winners due to strengthening profits and expectations for continued growth. Tech stocks in the S&P 500 rose twice as much as the overall index through the first 11 months of the year.

SIFTING THROUGH THE TAX DETAILS: Tech stocks began stumbling last week as expectations ramped up for Washington to push through an overhaul of the tax system. Technology companies already pay some of the lowest effective tax rates of companies in the S&P 500, so they have less to gain from the proposal.

That led to a 1.9 percent drop for tech stocks in the S&P 500 on Monday, after the Senate passed its version of the tax overhaul, as investors shifted out of the sector and into companies that stand to benefit most from lower rates, such as telecoms and financial companies. The Senate's proposal to keep the alternative minimum tax for all companies also hurt tech stocks. The result was one of the few drops for tech this year.

"I don't think this is the beginning of the end for tech," said Brian Nick, chief investment strategist at Nuveen. "Tech is going to be supported by very strong earnings, which is ultimately what's going to drive the market next year."

DOWN DAY: The stock market was mostly down, with losers outnumbering winners on the New York Stock Exchange by five to three. Telecom stocks fell 1.5 percent for the sharpest loss among sectors in the S&P 500. A day earlier, it had the market's strongest gains.

MARKETS ABROAD: European stock markets were down modestly as negotiations continue for the United Kingdom's pending departure from the European Union.

France's CAC 40 dipped 0.3 percent, and Germany's DAX fell 0.1 percent. The FTSE 100 in London lost 0.2 percent.

In Asia, Tokyo's Nikkei 225 index slipped 0.4 percent, Hong Kong's Hang Seng index dropped 1 percent and the Kospi in South Korea gained 0.3 percent.

YIELDS: Yields on Treasurys inched lower, as bond prices rose. The yield on the 10-year Treasury note dipped to 2.36 percent from 2.37 percent late Monday.

CURRENCIES: The dollar ticked up to 112.61 Japanese yen from 112.60 yen late Monday. The euro dipped to $1.1814 from $1.1855, and the British pound fell to $1.3438 from $1.3471.

COMMODITIES: Benchmark U.S. crude rose 15 cents to settle at $57.62 per barrel. Brent crude, the international standard, gained 41 cents to $62.86 a barrel in London.

Natural gas fell 7 cents to $2.91 per 1,000 cubic feet, heating oil rose 2 cents to $1.91 per gallon and wholesale gasoline gained 3 cents to $1.72 per gallon.

Gold slipped $12.80 to settle at $1,264.90 per ounce, silver lost 31 cents to $16.07 per ounce and copper dropped 14 cents to $2.95 per pound.

___

AP Business Writer Elaine Kurtenbach in Tokyo contributed to this report.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets
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