New York: The Dow Jones industrials and S&P 500 fell on Monday as uncertainty about the Obama administration’s plan to stem bank losses hit financial shares and Macy’s bleak outlook fueled worries the recession is worsening.
But the bet that technology stocks might be among early beneficiaries from a likely economic stimulus helped propel the Nasdaq higher.
Tech standouts included market bellwethers Microsoft Corp, up more than 4.2%, and Intel Corp, up over 5.6%
However, concerns about the apparent delay in a plan to shore up beleaguered banks and unease about wrangling in Washington over a stimulus measure helped undermine sentiment.
“Nobody is sure what solution is going to be put in place, how long it’s going to take, what the cost is going to be,” said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
The Dow Jones industrial average shed 64.11 points, or 0.80%, to 7,936.75 - its lowest closing level in 2009.
The Standard & Poor’s 500 Index dipped 0.45 point, or 0.05% to 825.43. The Nasdaq Composite Index gained 18.01 points, or 1.22%, to 1,494.43.
The surge in tech bellwethers following a sharp two-day technology sell-off, picked up speed at the end of a volatile session and helped temper some of the gloom about the economy and the fate of the bank aid plan.
On Nasdaq, shares of Apple Inc gained 1.5% to $91.51. After the closing bell, flash memory maker SanDisk Corp posted a big quarterly loss, but its revenue beat estimates handily, sending the stock up more than 3% after hours from a Nasdaq close of $11.28.
Among financials, Bank of America Corp slid about 9% to $6, while JPMorgan declined 1.3% to $25.19.
US President Barack Obama said in an interview with NBC it was likely that banks have not fully acknowledged all their losses and that “some banks won’t make it” through the crisis.
Investors had hoped Obama’s administration would be swift in unveiling the details of a plan to relieve banks of money-losing assets to kick-start lending. Obama said he did not want to pre-empt an announcement next week.
Shares of Macy’s Inc dropped 4% to $8.59 after the department store chain said it would cut 7,000 jobs and slashed its quarterly dividend.
On the economic front, the latest reading in a US manufacturing index showed manufacturing contracted again in January, but at a far smaller-than-expected pace.