Stocks mostly higher as tech, commodity shares gain; Dow flat
NEW YORK -- Investors are finding more than one way to bet on an improving economy.
Stocks ended a quiet day mostly higher Tuesday as traders pushed money into commodity and technology stocks.
Prices for commodities rose, reflecting hopes that economic activity will pick up and lead to greater appetite for basic materials. A falling dollar also helped push commodity prices higher, and oil settled above $70 a barrel for the first time since November.
Technology shares, meanwhile, rose more than the rest of the market as an improved profit forecast from chipmaker Texas Instruments raised hopes that demand could also increase for other kinds of technology goods.
Financial shares were mixed as traders absorbed an announcement from the Treasury Department that it would allow 10 large banks to repay $68 billion in federal bailout money. Those banks are among the 19 given money from a rescue fund created last October at the height of the financial crisis.
The news on the bailout repayments was encouraging for the troubled financial industry, but also widely expected. President Obama welcomed the news but also cautioned that much was left to do to repair the nation's banks.
"It's part of the healing process," said Rob Lutts, chief investment officer at Cabot Money Management in Salem, Mass.
A successful government auction of three-year notes pushed interest rates lower. The robust demand for government debt reassured investors who have worried in recent weeks that rising interest rates would choke off a recovery by making it more expensive for consumers to get loans.
Another key test of investor appetite for Treasury debt is coming up on Wednesday with an auction of $19 billion in 10-year notes. Yields on those notes are closely tied to home mortgages and a closely watched barometer for long-term lending rates.
Bonds were mixed. The benchmark 10-year Treasury note rose, pushing its yield down to 3.86% from 3.89% late Monday.
Analysts said the third consecutive day of quiet trading in the market was a welcome sign after a 39.3% surge in the Standard & Poor's 500 index over the past three months, when it hit 12-year lows.
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