Updated from 3:32 p.m. EDT
Technology stocks advanced on Tuesday, but it wasn't enough to prop up all three major averages as oil climbed to $70 a barrel and investors mulled news that some banks have been cleared to repay taxpayer bailout funds.
Dow Jones Industrial Average
lost 1.43, or 0.02%, to 8763.06, while the
rose 3.29 points, or 0.4%, to 942.43. The
added 17.73 points, or 1%, to 1860.13. The Dow churned all day, crossing back and forth across the flat line 81 times.
Crude oil climbed $1.92 to settle at $70.01 a barrel, a record for the year, as the Energy Information Administration forecast increased oil demand for 2009.
added some support to the tech sector. Shares were up 6.3% at $21.02 after the company
for its second-quarter profit and revenue.
That news offered other chipmakers a boost, as
added 3.4%, and
moved up 3.1%
Outside of tech,
rebounded from early week losses, gaining 3.5% and 2.8%, respectively, on
rose 5%, however, to be the strongest component on the index after confirming it will repay Troubled Asset Relief Program (TARP) funds.
The KBW Bank Index added about 0.5% after the Treasury said Tuesday that 10 banks
to pay back about $68 billion in TARP funds -- more than double the amount previously expected.
"These repayments follow a period in which many banks have successfully raised equity capital from private investors," said the U.S. Treasury in a statement. "Also, for the first time in many months, these banks have issued long-term debt that is not guaranteed by the government." Treasury Secretary Geithner called the repayments "encouraging," but added, "We still have work to do."
Although the government didn't disclose which banks had been notified of their clearance to repay funds, all 10 have confirmed it themselves. They include
, American Express ,
Capital One Financial
Bank of New York Mellon
"I think it's good news that we're seeing progress on that front, and I'm encouraged that banks are able to raise private capital," says Jack Ablin, chief investment officer, Harris Private Bank. "I would like to see the housing market stabilize to really feel that the foundation on which these banks are built is sound, but the fact that these stress test winners are able to pay their TARP money back is encouraging."
But Ablin doesn't think it's roses for everyone. "It is going to put those that still have government support at a disadvantage," he says. "They'll have a potentially difficult time attracting and retaining clients and talent because of the government oversight."
In a address regarding the TARP repayments, President Obama said the return of the money would help to immediately reduce the deficit. The president focused many of his remarks on the deficit, saying that, "All told in the next four years the deficit will be cut in half."
In order to help those efforts, the president said he was submitting a proposal for so-called pay-go (or pay-as-you-go) budgeting legislation. The legislation would require that "Congress can only spend a dollar if it saves a dollar elsewhere," said the president.
Economic data for the week began to trickle in on Tuesday, as the Department of Commerce reported that wholesale inventories decreased by about 1.4% in April after a 1.6% decline in March, slightly more than expected.
In other corporate news,
, former chairman and CEO of
, as its new chairman, and said six current board members are likely not long for their positions. Whitacre will take over when new GM is launched later this year, after it emerges from bankruptcy court.
Meanwhile, women's apparel retailer
said it plans to cut headcount by an additional 20% to trim costs as it swung to a first-quarter loss on a steep drop in sales. Shares rose 0.2% to $5.01.
Also, the Swiss government said it's considering selling it's 6 billion-franc ($5.5 billion) stake in
. It said it's in talks with several potential buyers for the stake, which was part of a $60 billion bailout package reached for UBS last October. UBS shares added 0.8%, or 11 cents, to $13.85.
Many market watchers have an eye on a series of Treasury auctions this week. A $35 billion, three-year note auction Tuesday afternoon, went "very well," wrote Vince Farrell, chief investment officer at Soleil Securities and a
contributor. It was the first leg of the government's planned $65 billion in sales of notes and bonds this week.
"This auction was expected to do well," writes Farrell. "The bigger issue
or worry is with the 10-year tomorrow. The bid to cover and the foreign buying will be the focus."
Longer-dated Treasuries were mixed with the 10-year gaining 4/32, yielding 3.86%; the 30-year was down 23/32 to yield 4.66%. The dollar was recently weaker against the yen, but stronger vs. the pound and euro. Gold rose $2.20 to $954.70 an ounce.
Stocks overseas were varied. London's FTSE 100 and Frankfurt's Dax were down 0.1% each, respectively. In Asia, Japan's Nikkei was down 0.8%, while Hong Kong's Hang Seng fell 1.1%.