Stocks lower as traders sell blue chips

Stocks lower as large company stocks fall; Vertex Pharmaceuticals lifts biotechnology sector

Associated Press
Stocks end lower as traders sell blue chips
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FILE - In this Monday, March 8, 2010, file photo, a sign for Wall Street is shown near the New York Stock Exchange. World stock markets struggled for direction Tuesday, June 24, 2014, after Wall Street fell for the first time in seven days, in a possible sign that investors were pausing to re-evaluate the market's recent highs. (AP Photo/Mark Lennihan, File)

NEW YORK (AP) -- U.S. indexes mostly fell Tuesday afternoon, led by declines in blue-chip stocks. Homebuilders rose after the government reported sales of new homes rose in May to the highest level in six years.

KEEPING SCORE: The Dow Jones industrial average fell 72 points, or 0.4 percent, to 16,865 as of 2:49 p.m. Eastern. The Standard & Poor's 500 index fell five points, or 0.3 percent, to 1,957 and the Nasdaq composite rose six points, or 0.1 percent, to 4,374. The Dow and S&P 500 are still near record highs.

Nasdaq got a boost from Micron Technology, which jumped $1.54, or 5 percent, to $32.80. The semiconductor maker reported better-than-expected profit and raised its earnings forecast for the next quarter. Dow component Intel, another major chipmaker, rose 38 cents, or 1.3 percent, to $30.61.

BLUE CHIPS DOWN: The Dow fell far more than the S&P 500 and Nasdaq as investors sold large, brand-name stocks. ExxonMobil, Verizon Communications, American Express and JPMorgan Chase all fell 1 percent or more. The blue chip selling is a recent and notable change in trader behavior. Diversified, large company stocks have been among the most popular this year.

DRUG BOOST: Vertex Pharmaceuticals, which is also listed on the Nasdaq, soared $27.03, or 41 percent, to $93.74 after saying its treatment for cystic fibrosis appeared to work better than a placebo in a late-stage study. Vertex plans to seek approval for the treatment in the U.S. and Europe.

Traders say it's a positive sign to see investors heading back into biotechnology stocks. The sector was among the hardest hit in March and April.

"That was a growth area that worried a lot of people, but the news out of Vertex is very bullish," said Ian Winer, director of stock trading at Wedbush Securities. "The news has renewed a risk appetite in that space we have not seen in months."

INDICATORS: The Commerce Department said sales of new homes jumped 18.6 percent in May to an annualized rate of 504,000. That's the highest level since May 2008. In a separate report, the Conference Board said consumer confidence rose to 85.2 in June, better than the 83.5 economists had predicted.

Homebuilders advanced on the new homes report, with Pulte Homes, Toll Brothers, KB Home and Ryland all up 1 percent or more.

BONDS AND COMMODITIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.61 percent from 2.63 on Monday. The price of oil was little changed at $106.32 a barrel.

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