Stock market erases gains as tech shares weigh

By IBTimes Staff Reporter | January 29 2010 12:32 PM

The stock market turned mixed in mid-day trading after rising sharply on Friday as the technology sector continues to weigh while retail stocks were among the biggest gainers.

Sponsorship Link

The S&P 500 Index is up 0.75 points, or 0.07 percent to 1,085.28 at 12:30 p.m. It had shot past 1096 points earlier in the session. The Dow Jones Industrial average is up 0.84 percent to trade at 1085.37 and the tech heavy NASDAQ Composite is down 0.26 percent , or 5.6 points to trade at 2,173.4 points.

Retailers are among the biggest gainers. Wal-Mart (NYSE:WMT) is up 2.27 percent, Macy's (NYSE:M) up 2.09 percent, Costco (NASDAQ:COST) up 0.80 percent, online retailer Amazon.com (NASDAQ:AMZN) up 2.52 percent, and Home Depot (NYSE:HD) is up 1.43 percent.

Tech stocks continue to weigh on the stock market. Apple (NASDAQ:AAPL), despite announcing stellar earnings and unveiling its iPad earlier in the week, continues to drop. It is down 1.81 percent today to trade at $194.90. Microsoft (NASDAQ:MSFT) is down 2.09 percent, despite reporting solid earnings last night. Computer retailer Dell (NASDAQ:DELL) is down 2.48 percent and HP (NYSE:HPQ) is down 1.08 percent.

The fourth quarter Gross Domestic Product report, which lifted the broad stock market in morning trading, showed an emerging US savings glut. The American public saved over $1 trillion during the third and fourth quarter. Although unemployment is still at double digits, overall income has increased while spending has not kept pace. Disposable income rose 4.8 percent while personal consumption rose only 2.0 percent.

The middle class may also enjoy favorable policies from Washington. Obama proposed various tax cuts for the middle class. He proposed to take $30 billion of the money collect from Wall Street firms and give it to community banks, in order to improve credit conditions for Americans.

Last night, Obama proposed various initiatives that will encourage small businesses to hire more employees and pay them higher wages.

The GDP report also revealed that the final sales of computers, which measures the effect computers have on the GDP by the contributions to percent change methodology, actually had a slightly negative on impact on the GDP over the last three quarters.

The latest durable goods new orders report also shows that while the overall figure increased, new orders for computers and electronic parts fell 3 percent in December.