Tech shares gain in choppy session
Nasdaq rises as Microsoft, Apple, Yahoo bounce; broader market mixed; lower oil prices bring some relief.
NEW YORK (CNNMoney.com) -- Tech shares boosted the Nasdaq on Tuesday and kept the broader market stable by the end of a choppy session in which profit warnings from retailers and a big drop in consumer confidence revived worries about the economy.
In other news, August existing home sales posted a dip. But on the upside, oil prices dropped below $80 a barrel.
The Dow Jones industrial average (Charts) added a few points, according to early tallies, while the broader S&P 500 (Charts) index was little changed. The tech-fueled Nasdaq composite (Charts) added 0.6 percent.
Treasury prices rose, lowering the corresponding yields. Gold prices dipped.
Here's a look at what was moving markets near the close.
Stocks have been choppy so far this week, as investors have mulled disappointing company news and continued to wrestle with the implications of the Fed's decision to cut interest rates last week.
Wall Street breathed a sigh of relief after the Federal Reserve cut a key short-term interest rate by a half-percentage point, surprising many investors who expected a smaller cut.
"Stocks rallied last week on a knee-jerk reaction to the Fed," said Joseph Saluzzi, co-head of equity trading at Themis Trading. "Then there was a digestion over the weekend and now people are split into two camps, wondering if the half-point cut is going to keep us out of a recession or drive up inflation."
As a result of those concerns, the personal income and spending report at the end of the week, as well as the report's inflation component, the PCE, will be closely watched, Saluzzi said.
Retailers were in focus Tuesday, with two major companies warning about profits.
After the close Monday, home improvement retailer Lowe's (Charts, Fortune 500) warned that fiscal 2007 earnings will come in at the low end or slightly below its prior guidance of $1.97 to $2.01 per share.
Investors were also keeping an eye on GM (Charts, Fortune 500), as it resumed contract talks with the United Auto Workers union one day after the UAW launched a nationwide strike against the automaker.
On the upside, Microsoft (Charts, Fortune 500) shares rose after the launch of its Halo 3 video game at midnight. Separately, it was reported Monday that the technology leader is in talks to buy a stake in Facebook, a move that could value the social-networking site at up to $10 billion.
Maxim is being removed from the S&P 500 after the close of trading on Wednesday. The company is scheduled to be delisted by the Nasdaq around the same time. InterContinental is being added to the S&P 500 after the close of trading Tuesday, replacing First Data, which was taken private by Kohlberg Kravis Roberts.
S&P 500 changes typically spark heavy trading in the stocks that are being moved, since index fund managers must adjust their portfolios to accommodate the changes.
Market breadth was negative. On the New York Stock Exchange, losers topped winners by almost five to three on volume of 1.03 billion shares. On the Nasdaq, decliners beat advancers 4 to 3 on volume of 1.59 billion shares.
On the economic front, consumer confidence in September dropped to a lower-than-expected level of 99.8, according to a Conference Board report released in the morning. Economists thought it would ease to 104.5 from an upwardly revised 105.6 in the previous month.
August existing home sales fell to a 5.50 million unit annual rate, from 5.75 million units in the previous month. The drop was in line with forecasts.
Another report showed that July home prices posted the biggest monthly drop in 16 years.
Tuesday was the start of a busy week for economic news, with reports on durable goods orders, GDP, new home sales and personal income and spending due later in the week.
Treasury prices rose, lowering the yield on the 10-year note to 4.61 percent from 4.62 percent late Monday. Bond prices and yields move in opposite directions.
In currency trading, the dollar bounced off a new record low against the euro hit on Monday, but slipped against the yen.
U.S. light crude oil for November delivery lost $1.43 to $79.53 a barrel on the New York Mercantile Exchange.
Last week, the October contract settled at a record high of $83.32. However, the record price remains below inflation-adjusted highs hit in the early 1980s, which would be equal to at least $95 a barrel today.
COMEX gold for December delivery fell 50 cents to $738.80 an ounce.