Stocks climbed into positive territory at the halfway point Wendesday, led by technology, after Intel's strong earnings and outlook.
Stocks were lower for most of the morning after a disappointing retail sales data and a report out of Europe that 11 banks will fail their stress test.
Intel shares jumped more than 3 percent after the world's biggest maker of computer chips also gave an upbeat estimate for sales as it swung to a profit for its second quarter.
That gave the whole tech sector a boost, with Microsoft , Cisco and Hewlett-Packard leading handful of Dow gainers.
But Apple shares continued to slide amid worries about a glitch with the iPhone 4 that caused Consumer Reports to say it can't recommend the product.
JPMorgan and Bank of America were among the biggest drags on the Dow following the news about some European banks failing their stress tests. The number of banks flagged was relatively small but still raised concern about the overall health of the banking sector.
Retail stocks were weak after a report showed retail sales declined for the second monthin a row. Import and export prices also declined, with import prices falling a surprisingly large 1.3 percent in June, the largest decline since January 2009.
In the day's other economic news, mortgage applications fell to a 13-year low last week despite record low mortgage rates, and business inventories rose for a fifth straight month but sales fell for the first time in more than a year.
“Few people think the recession is over and that uncertainty is creating a very cautious consumer," Joel Naroff of Naroff Economics wrote in a note to clients.
And shares of major homebuilders such as D.R. Horton and Pulte Homes fell after Goldman Sachs downgraded the homebuiling sector to "neutral" from "attractive," citing slowdown in US growth and correspondingly sluggish home sales.
Still to come: The Federal Open Market Committee will released the minutes from its last monetary-policy meeting, which could give clues on the Fed's economic outlook and future decisions on interest rates.
The Treasury will sell $13 billion in 30-year bonds today with the auction results available shortly after 1 pm.
Meanwhile, the Gulf oil spill continues as BPdelayed its latest bid to stem the flow of oil from its leaking well. Shares of BP were lower in London trading, but closed slightly higher in New York trading Tuesday.
On the earnings front, ASML will report numbers ahead of the opening bell and Marriott is expected to report after the bell.
Still to Come:
WEDNESDAY: Fed minutes
THURSDAY: PPI; Empire State survey; weekly jobless claims; industrial production; Philly Fed survey; Yellen nomination hearing; Fed's Lacker speaks; Earnings from JPMorgan, Novartis, Google and AMD
FRIDAY: CPI; consumer sentiment; Earnings from Bank of America, Citigroup, GE and Gannett
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