Nasdaq, S&P Rise, but Not Dow

Oil settles a penny above $70 a barrel, and 10 U.S. banks have been approved to repay a total of $68 billion in bailout funds.
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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.

The

Dow Jones Industrial Average

lost 1.43, or 0.02%, to 8763.06, while the

S&P 500

rose 3.29 points, or 0.4%, to 942.43. The

Nasdaq Composite

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.

Among stocks,

Texas Instruments

(TXN) - Get Report

added some support to the tech sector. Shares were up 6.3% at $21.02 after the company

raised expectations

for its second-quarter profit and revenue.

That news offered other chipmakers a boost, as

National Semiconductor

(NSM)

rose 4.4%,

Intel

(INTC) - Get Report

added 3.4%, and

Advanced MicroDevices

(AMD) - Get Report

moved up 3.1%

Outside of tech,

Alcoa

(AA) - Get Report

and

DuPont

(DD) - Get Report

rebounded from early week losses, gaining 3.5% and 2.8%, respectively, on

the Dow

.

American Express

(AXP) - Get Report

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

are approved

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

Morgan Stanley

(MS) - Get Report

, American Express ,

Goldman Sachs

(GS) - Get Report

,

BB&T

(BBT) - Get Report

,

U.S.Bancorp

(USB) - Get Report

,

JPMorgan Chase

(JPM) - Get Report

,

Capital One Financial

(COF) - Get Report

,

Bank of New York Mellon

(BK) - Get Report

,

Northern Trust

(NTRS) - Get Report

, and

State Street

(SS)

.

"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,

General Motors

(GMGMQ)

named

Edward Whitacre

, former chairman and CEO of

AT&T

(T) - Get Report

, 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

Talbots

(TLB)

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

UBS

(UBS) - Get Report

. 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

RealMoney.com

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%.