NEW YORK: US stocks sputtered to a mixed finish on Tuesday as fears about rising interest rates that could hamper an economic recovery offset upbeat news from the tech sector.
The market also mulled the impact of news some major banks would be able to repay the government for capital injections, in another sign the financial system was stabilising.
The Dow Jones Industrial Average fell 1.43 points (0.02 percent) to close at 8,763.06 after a choppy session that saw swings in and out of positive territory.
The Nasdaq composite rose a solid 17.73 points (0.96 percent) to 1,860.13 and the Standard & Poor's 500 index edged up 3.29 points (0.35 percent) to 942.43.
The market gave a mixed response to a decision allowing 10 major US banks to repay the Treasury 68 billion dollars for capital injections made to stabilise the financial system.
"This is a clear signal that the government isn't intent on nationalising the banking system as was feared earlier this year," said Ed Yardeni at Yardeni Research.
"It also demonstrates that the government needs the money to shore up other financial institutions, but can't get any more funds from Congress."
But Elizabeth Harrow at Schaeffer's Investment Research said some traders were skeptical despite upbeat comments from Treasury Secretary Timothy Geithner.
"Geithner called the repayments 'an encouraging sign of financial repair,' but traders weren't so easily convinced," she said.
"Many sector heavyweights, including Bank of America and Citigroup, won't be eligible to start paying off Uncle Sam for at least five more months. In the interim, these banks will face tight government scrutiny."
The market remained worried on Tuesday about rising bond yields that could put pressure on interest rates kept at virtually zero levels to help boost economic activity and jolt the economy from prolonged recession.
"Interest rates, particularly between two-year and 10-year maturities, continue to drift up in anticipation of the huge supply of new paper coming to market and questions as to the willingness of foreign buyers to step in and pick up the new supply," said Fred Dickson at DA Davidson & Co.
"The recent rise in interest rates will place more pressure on the US deficit projections as it will cost more to fund government programmes."
Wall Street's worry on yields even eclipsed a better-than-expected mid-quarter update from Texas Instruments, a key semiconductor firm.
Bond prices ended mixed after a rocky session a day earlier. The yield on the 10-year Treasury bond fell to 3.858 percent from 3.889 percent on Monday and that on the 30-year bond rose to 4.653 percent from 4.635 percent. Bond yields and prices move in opposite directions.
Texas Instruments, which said late Monday that it expected higher sales and profits in the current quarter, jumped 6.3 percent to 21.02 dollars.
Banks that were allowed to repay their government aid were mixed.
Morgan Stanley fell 1.3 percent to 30.98 dollars, JPMorgan Chase was down 0.37 percent to 35.26 dollars and US Bancorp shed 0.93 percent to 18.18 dollars while BB&T was up 2.37 percent at 22.45 dollars and Capital One added 2.6 percent to 24.05 dollars. - AFP/de
The market also mulled the impact of news some major banks would be able to repay the government for capital injections, in another sign the financial system was stabilising.
The Dow Jones Industrial Average fell 1.43 points (0.02 percent) to close at 8,763.06 after a choppy session that saw swings in and out of positive territory.
The Nasdaq composite rose a solid 17.73 points (0.96 percent) to 1,860.13 and the Standard & Poor's 500 index edged up 3.29 points (0.35 percent) to 942.43.
The market gave a mixed response to a decision allowing 10 major US banks to repay the Treasury 68 billion dollars for capital injections made to stabilise the financial system.
"This is a clear signal that the government isn't intent on nationalising the banking system as was feared earlier this year," said Ed Yardeni at Yardeni Research.
"It also demonstrates that the government needs the money to shore up other financial institutions, but can't get any more funds from Congress."
But Elizabeth Harrow at Schaeffer's Investment Research said some traders were skeptical despite upbeat comments from Treasury Secretary Timothy Geithner.
"Geithner called the repayments 'an encouraging sign of financial repair,' but traders weren't so easily convinced," she said.
"Many sector heavyweights, including Bank of America and Citigroup, won't be eligible to start paying off Uncle Sam for at least five more months. In the interim, these banks will face tight government scrutiny."
The market remained worried on Tuesday about rising bond yields that could put pressure on interest rates kept at virtually zero levels to help boost economic activity and jolt the economy from prolonged recession.
"Interest rates, particularly between two-year and 10-year maturities, continue to drift up in anticipation of the huge supply of new paper coming to market and questions as to the willingness of foreign buyers to step in and pick up the new supply," said Fred Dickson at DA Davidson & Co.
"The recent rise in interest rates will place more pressure on the US deficit projections as it will cost more to fund government programmes."
Wall Street's worry on yields even eclipsed a better-than-expected mid-quarter update from Texas Instruments, a key semiconductor firm.
Bond prices ended mixed after a rocky session a day earlier. The yield on the 10-year Treasury bond fell to 3.858 percent from 3.889 percent on Monday and that on the 30-year bond rose to 4.653 percent from 4.635 percent. Bond yields and prices move in opposite directions.
Texas Instruments, which said late Monday that it expected higher sales and profits in the current quarter, jumped 6.3 percent to 21.02 dollars.
Banks that were allowed to repay their government aid were mixed.
Morgan Stanley fell 1.3 percent to 30.98 dollars, JPMorgan Chase was down 0.37 percent to 35.26 dollars and US Bancorp shed 0.93 percent to 18.18 dollars while BB&T was up 2.37 percent at 22.45 dollars and Capital One added 2.6 percent to 24.05 dollars. - AFP/de
