Stocks ended mixed in choppy trading Tuesday after 10 banks were approved to repay TARP loans.
The Dow Jones Industrial Average ended at about the same place it did in the previous session, shedding just over a point. The S&P 500 gained 0.4 percent, while the Nasdaq jumped 1 percent after Texas Instruments raised its outlook.
Ten banks will be allowed to repay capital they received through the Troubled Asset Relief Program. The companies are expected to give back some $68 billion, about twice what the government expected.
The ten stocks ended mostly higher: The best performer on the list was American Express, which gained 5 percent. Capital One rose 2.6 percent and BB&T advanced 2.4 percent.
Three of the ten declined: JPMorgan, Morgan Stanley and US Bancorp.
"What that's telling you is that banks are spending all their money paying back the government and not doing what that money was intended to do, which was to stimulate the economy and lend that money," Marc Pado, U.S. market strategist at Cantor Fitzgerald, told Reuters.
Among those notably absent from the list were Bank of America , Citigroup and Wells Fargo .
Late Monday, Citigroupsaid it expected to begin its much-delayed $58 billion stock swap later this week as part of a plan that could leave the government with a 34 percent stake.
Banks continue to hold large amounts of toxic assets and the stress tests should be repeated if unemployment worsens, a Congressional Oversight Panel report showed.
And all ten banks under order to raise additional capital have submitted their plans, the Federal Reserve said.
On the economic front, wholesale inventories shrunk by 1.4 percent in April, more than the 1.2-percent decline expected.
Technology stocks rallied after Texas Instruments raised its earnings and revenue targets for the second quarter, signaling improving demand in the chip market. TI shares soared more than 6.3 percent.
Intel was among the biggest gainers on the Dow, up 3.1 percent.
And Cisco , which was added to the Dow this week to replace GM, gained 1.1 percent.
General Motors shares gained about 24 percent following news that former AT&T chief Ed Whitacre will be GM's new CEO, succeeding Kent Kresa. Kresa will remain interim chairman until GM emerges from bankruptcy protection.
Meanwile, Italy's Fiat and Chrysler urged the Supreme Court to approve the deal quickly. Fiat has said it won't walk away from the deal. The deadline for the deal is June 15.
Procter & Gamble shares skidded 1.4 percent amid buzz that the company, which makes Gillette razors and Tide detergent, is about to name Robert McDonald as its new CEO. McDonald has been the front-runner expected to succeed longtime CEO A.G. Lafley.
Apple shares fell 0.8 percent a day after the company slashed the price on its entry-level iPhone to $99.
Shares of rival Palm , which released its iPhone competitor, the Pre, this past weekend, rose 4.4 percent. American depositary shares of BlackBerry maker Research In Motion ticked up 0.1 percent.
In the steel sector, Standard & Poor's cut its credit rating on ArcelorMittal, the world's largest steelmaker, and issued a negative outlook.
Still, shares of ArcelorMittal as well as those of US Steel gained.
Crude oil rose nearly $2 to close just over the $70 mark at $70.01 a barrel.
Trading volume was low, with about 1.06 billion shares changing hands on the New York Stock Exchange. Advancers outpaced decliners about 3 to 2.
MON-FRI: Apple developers' conference
TUESDAY: Joint congressional hearing on TARP oversight
WEDNESDAY:Weekly mortgage applications; Fed's Evans speaks; Weekly crude inventories; federal budget; Fed's beige book
THURSDAY: Retail sales; weekly jobless claims; business inventories; Fed's Lockhart speaks; Earnings from Nat Semi
FRIDAY: Import/export prices; consumer sentiment