June 23, 2009 / 9:53 AM / in 8 years

S&P gains on bargain hunting, but Boeing hits Dow

NEW YORK (Reuters) - The S&P 500 rose on Tuesday as investors hunted for bargains a day after a steep sell-off, but another delay for Boeing’s 787 Dreamliner kept the Dow in the red.

<p>A man reads outside the New York Stock Exchange June 23, 2009. REUTERS/Eric Thayer</p>

Shares that led the market down on Monday, when the market suffered its worst one-day loss in two months, were among the positive influences, including banks, energy and materials.

JPMorgan Chase (JPM.N) shares rose 2.1 percent to $33.57 after falling 6.1 percent on Monday, while Bank of America (BAC.N) gained 2.4 percent to $12.23 a day after sliding 9.7 percent. Shares of Chevron Corp (CVX.N) rose 0.3 percent to $65.96 after losing 3.4 percent on Monday.

There was also caution a day ahead of the Federal Reserve’s assessment of economic conditions.

“The market’s really trying to stabilize after a pretty sharp decline yesterday,” said Michael Sheldon, chief market strategist of RDM Financial in Westport, Connecticut.

Energy shares also got a boost from a 2.6 percent gain in U.S. oil futures prices.

The Dow Jones industrial average .DJI was down 16.10 points, or 0.19 percent, at 8,322.91. But the Standard & Poor's 500 Index .SPX was up 2.06 points, or 0.23 percent, at 895.10. The Nasdaq Composite Index .IXIC was down 1.27 points, or 0.07 percent, at 1,764.92.

The broad S&P 500 index dropped back into negative territory for the year on Monday. Although the index is up about 32 percent from a 12-and-a-half-year low hit in early March, it had been up as much as 40 percent.

ORACLE JUMPS LATE

After the close, shares of Oracle Corp ORCL.O gained 1.4 percent to $20.14 after the software maker reported profit and sales that beat forecasts. The stock had closed at $19.87 on Nasdaq.

During the regular session, Boeing Co (BA.N) dominated the downside. The plane maker’s stock was the Dow’s biggest drag after the company said the inaugural flight of its long-delayed 787 Dreamliner will be postponed so it can reinforce a section of the aircraft.

Boeing’s stock fell 6.5 percent to $43.87, marking its worst one-day drop since November.

Other industrial shares also fell, including United Technologies Corp (UTX.N), down 1.4 percent at $51.84.

After its two-day meeting ends Wednesday, the Fed is widely expected to leave the benchmark fed funds rate at almost zero. But investors will check its statement closely for clues on the central bank’s economic outlook.

“The only question will be what they say after the meeting in terms of tempering investors’ expectations about when the Fed will ultimately start to rein in liquidity and tighten policy,” Sheldon said.

On the economic front on Tuesday, data showing sales of used homes rose in May at a pace that was below expectations initially caused stocks to pare gains. But the data also showed it was the first time the numbers rose in two consecutive months since September 2005.

U.S. crude oil rose $1.74 to settle at $69.24 a barrel, also reversing a slide of almost 4 percent from the previous day. Exxon Mobil Corp (XOM.N) gained 0.2 percent to $68.95 after losing 3.1 percent on Monday.

Trading volume was below average on the New York Stock Exchange, with about 1.21 billion shares changing hands, under last year’s estimated daily average of 1.49 billion, while on Nasdaq, about 2.18 billion shares traded, below last year’s daily average of 2.28 billion.

Declining stocks outnumbered advancing ones on the NYSE by 1,577 to 1,418 while on the Nasdaq, 1,574 stocks fell and 1,075 stocks rose.

Editing by Jan Paschal

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