Stocks mixed as tech drags down market; BofA sinks

Stocks turn mixed as technology drags down the rest of the market; BofA sinks bank stocks

Associated Press
Stocks higher on deal hopes; BofA sinks
.

View photo

Trader Michael Smyth works on the floor of the New York Stock Exchange Monday, April 28, 2014. Stocks are mostly higher in early trading as traders hope for another blockbuster merger in the health-care industry. (AP Photo/Richard Drew)

NEW YORK (AP) -- After trading higher most of Monday morning, stocks pulled back at midday as bank and technology companies weighed on the market. Health-care companies were a bright spot, helped by a potential blockbuster pharmaceutical deal.

KEEPING SCORE: The Standard & Poor's 500 was unchanged at 1,864. The Dow Jones Industrial average was up 60 points, or 0.4 percent, to 16,420, after rising nearly 140 points earlier. The Nasdaq was down 30 points, or 0.7 percent, to 4,045.

BANK WORRIES: Bank of America sank 84 cents, or 5.2 percent, to $15.12 after it unexpectedly announced it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.

Other banks moved lower. Goldman Sachs fell 2 percent, while Wells Fargo, JPMorgan Chase and Citigroup were down roughly 0.5 percent each.

PFIZER COURTS ASTRAZENECA: Pfizer renewed its push to buy British drug company AstraZeneca for $100 billion. The deal would be the latest big merger in the drug industry in recent weeks, if it happens. AstraZeneca jumped $10.96, or 16 percent, to $79.60. Pfizer rose 99 cents, or 3 percent, to $31.70.

MORE PAIN FOR TECH: The technology-heavy Nasdaq took the brunt of the midday selling, as investors once again sold risky tech stocks. Amazon was down $13.60, or 4.5 percent, to $290.50 after falling 10 percent on Friday. Netflix was down $18.60, or 6 percent, to $303.18 and Facebook dropped $2.64, or 5 percent, to $55.04.

After snapping up tech stocks last year, investors have spent most of 2014 punishing them. The Nasdaq is down 3.7 percent in April, compared with the 0.5 percent fall in the S&P 500 and 0.2 percent decline in the Dow.

"The froth is finally burning off in some of these sectors like technology," said Quincy Krosby, a market strategist at Prudential Financial. "Investors want to rely more on fundamentals, and it's hard to justify some of these valuations."

FED WATCH: The Fed will start a two-day policy meeting on Tuesday. The central bank is expected dial back further its stimulus for the U.S. economy by reducing monthly bond purchases to $45 billion. Those purchases, which totaled $85 billion in December, have helped hold down long-term interest rates for consumers and businesses.

UKRAINE: Investors are watching the tensions between Ukraine and Russia. The White House announced additional sanctions against seven Russian officials and several companies in response to Russia's annexation of Crimea. In a separate development, the mayor of Ukraine's second-largest city was wounded by an unidentified gunmen.

Rates

View Comments (19)