* Biotech shares slip for second day this week
* Consumer confidence hits six-year high in March
* Walgreen, McCormick shares rally after results
* Dow up 0.3 pct; S&P 500 up 0.2 pct; Nasdaq off 0.2 pct
(Updates to midday)
By Angela Moon
NEW YORK, March 25 U.S. stocks sharply trimmed
gains by midday on Tuesday as many of the market's momentum
stocks turned negative.
Offsetting a strong reading on consumer confidence that had
boosted the market earlier, the tech-heavy Nasdaq index led the
market lower for a second day this week. The Nasdaq
Biotechnology Index fell 1.2 percent after rising more
than 2 percent earlier.
Selling pressure has also intensified of late as valuations
reach levels not seen in almost a decade. The forward
price-to-earnings ratio on the S&P 500 recently hit its highest
since early 2005, and is trading above the historical median,
according to Thomson Reuters IBES data.
So-called momentum stocks fell sharply near midday,
including Netflix, down 3 percent at $367.50, and First
Solar Inc, down 4 percent at $70.93. Netflix has
declined for 14 of the past 15 sessions, falling almost 19
percent over that stretch.
Biotech shares slipped, including Regeneron Pharma
, down 1.3 percent at $302.78, and Biogen Idec,
down 2.2 percent at $305.84.
"Anecdotally, it does seem that when there's upside
momentum, people jump into risky names, and then they bail
fairly quickly when they have concerns," said Randy Frederick,
managing director of active trading for Charles Schwab in
"I wouldn't say that the market at large is at risk of
falling just because these did. There's nothing on the S&P that
would make people concerned from a technical perspective. We're
well above the 50-day moving average and haven't touched the
200-day in years. So far, fund flows indicate that people aren't
The Dow Jones industrial average was up 49.55 points,
or 0.30 percent, at 16,326.24. The Standard & Poor's 500 Index
was up 3.30 points, or 0.18 percent, at 1,860.74. The
Nasdaq Composite Index was down 6.83 points, or 0.16
percent, at 4,219.55.
The Dow had traded at an intraday high of 16,404.46, while
the S&P 500 had climbed as high as 1,871.87 earlier in the
session and the Nasdaq had hit a session high at 4,274.321..
The CBOE Volatility Index or VIX, Wall Street's
so-called fear gauge, was down 1.1 percent at 14.92.
Data showed consumer confidence rose more than expected in
March, climbing to its highest level since January 2008. The
report was the latest in a string of positive reads on the U.S.
economy that supported theories that softness early this year
was related to bad weather and not weakening fundamentals.
Investors continued to watch global issues cautiously. On
Monday, major stock indexes fell on concerns that the crisis in
Ukraine could escalate, pushing traders to take profits in such
high-flying sectors as biotech and Internet shares. Those names
rebounded on Tuesday, with some of Monday's biggest decliners
topping the list of advancing S&P 500 names.
In the latest on the housing market, U.S. single-family home
prices rose slightly more than expected in January, according to
the S&P/Case-Shiller composite index of 20 metropolitan areas,
while new home sales fell more than expected in February.
In company news, Walt Disney Co agreed to buy Maker
Studios, one of YouTube's largest networks, for $500 million,
though the price tag could rise to $950 million if the company
hits certain performance milestones. Shares of the Dow component
slid 0.9 percent to $78.78.
Shares of Carnival Corp slumped 5.3 percent to
$37.91 as one of the S&P 500's biggest decliners after the
cruise operator warned that it might post a loss in its current
(Editing by Jan Paschal)