NEW YORK (Reuters) - The Nasdaq rose on Tuesday after an improved outlook from Texas Instruments lifted technology stocks, but news that 10 big banks will repay TARP funds failed to stir investor enthusiasm.
Shares of Texas Instruments Inc (TXN.N) jumped 6.3 percent to $21.02 after the company raised its quarterly earnings and revenue targets, signaling improving demand in the chip market.
The PHLX semiconductor index .SOXX climbed 4.5 percent.
"The guidance from Texas Instruments basically follows along with what Intel said mid-quarter that basically that there is a bottom forming and some first starts of improvement in the chip cycle," said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co in Lake Oswego, Oregon.
"That implies orders for tech equipment are starting to show early signs of picking up."
Stocks initially moved higher after the Treasury Department said 10 big banks will pay back $68 billion received under the Troubled Asset Relief Program, or TARP, to the government. But the market quickly fell back on concerns that the money could be put to better use by making loans to businesses and consumers, which would boost the economy.
"These banks want to pay back the TARP money almost immediately. What does that do to their balance sheet and their loaning capability?" said Carl Birkelbach, chairman and chief executive of Birkelbach Investment Securities in Chicago.
"If they were more concerned about the public, they would keep the cash and start loaning out money."
The Dow Jones industrial average .DJI dropped 1.43 points, or 0.02 percent, to 8,763.06. The Standard & Poor's 500 Index .SPX gained 3.29 points, or 0.35 percent, to 942.43. The Nasdaq Composite Index .IXIC climbed 17.73 points, or 0.96 percent, to 1,860.13. more...
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