Tech Stocks Rise But Broader Market Declines

Investors worried about the recession have turned to a strategy of cherry-picking stocks — sending tech shares higher and industrials lower.

According to preliminary calculations, the Nasdaq composite index rose 18.01, or 1.22 percent, to 1,494.43.

The Dow Jones industrial average, meanwhile, fell 64.11, or 0.80 percent, to 7,936.75, hurt by sliding industrial, energy and financial stocks. The Standard & Poor's 500 index slipped 0.45, or 0.05 percent, to 825.43. Both indexes had their worst January ever as investors, increasingly uneasy about the economy, gave back the gains from Wall Street's late-2008 rally.

The market's concerns Monday were focused on two fronts: the economic stimulus proposal that is now before the Senate, and a possible plan to give further aid to the nation's banks.

Meanwhile, mostly negative economic data and news of more layoffs helped extend the gloomy mood that gave the market its worst January ever.

Department store operator Macy's Inc. spooked investors by announcing it plans to cut 7,000 jobs or about 4 percent of its work force and reduce its dividend.

President Barack Obama made a fresh appeal to Congress, saying that "very modest differences" over the stimulus plan should not delay its passage. The stimulus package that passed the House last week without a single Republican vote now goes to the Senate. GOP lawmakers argue that the plan is too expensive and doesn't include adequate tax cuts.

"I think it's got legislative paralysis," David Waddell, senior investment strategist and chief executive of Waddell & Associates said of the market. "Everything occurring right now is predicated upon what the current conversation is in Washington, which makes it a very difficult market to evaluate."

The market was also eyeing reports that Treasury Secretary Timothy Geithner is expected to outline a bank rescue plan next week, said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc.

"The market is hoping for some resolution to the banking crisis," he said. Investors have been concerned that unrelenting loan losses could lead to a major bank failure.

All of the uncertainty Monday, which also included still-to-be-released fourth-quarter earnings reports, weighed on the overall market. But tech stocks were one of the few bright spots.

"Technology is one of the sectors that people, businesses are always going to need," said Keith Springer, president of Capital Financial Advisory Services. "There's a feeling that corporations are going to continue to invest in technology."

Microsoft Corp. jumped 73 cents, or 5.7 percent, to $17.83, and Intel Corp. added 73 cents, or 5.7 percent, to $13.63.

Copyright AP - Associated Press
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