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US blue-chip stocks rise; Apple clips Nasdaq

By Kate Gibson, MarketWatch –

NEW YORK — U.S. blue-chip stocks advanced Monday, with better-than-expected retail sales bolstering optimism, but a slide in the shares of Apple Inc. and Google Inc. dragged on the broader indexes.

A pickup in volatility is not unexpected during earnings season, said Bob Pavlik, chief market strategist at Banyan Partners.

“A lot of people are on edge now,” Pavlik said. “If you’re an investor, you don’t let this worry you; if you’re a trader, it’s probably a good opportunity to make some money.”

The Dow Jones Industrial Average ended up 71.82 points, or 0.6 percent, at 12,921.41.

Exxon Mobil Corp. and Travelers Co. contributed the most to the average’s gains.

The S&P 500 Index ended down 0.69 point, or 0.1 percent, at 1,369.57, losing gains late in the day. Tech stocks fell the most, dropping 1.2 percent, followed by a more moderate loss in consumer discretionary stocks. Utilities and financials were industry gainers, rising about 1 percent.

“It looks like ‘Sell the news,’ maybe on thinking, ‘how can it get any better?’ It looks like they are really taking a lot of these tech names out,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

Ablin pointed to the slide in shares of Apple, videogame publisher Electronic Arts Inc., search engine Google Inc. ad payment processor MasterCard Inc. as part of a consumer-driven decline.

In meetings in recent weeks, Apple was “a major topic of conversation, with many clients wondering what would happen to broader markets if Apple embarked on a perfectly normal correction of, say, 10 percent,” reported Dan Greenhaus, chief global strategist at BTIG LLC, in emailed remarks. “Well, we kind of have our answer.”

Shares of Apple fell 4.2 percent to $580.13, their worst drop since Oct. 19, and extending their slide into a fifth straight session. Apple shares are down 8.8 percent from last Monday’s close.

Google shares fell 3 percent to $606.07, extending losses into a second day.

Apple is the biggest component on the Nasdaq Composite, making up about 12 percent of the index, and Google is No. 3.

The combined losses made the Nasdaq the worst performing of the major indexes Monday. It ended down 22.93 points, or 0.8 percent, to 2,988.40.

“Some of the damage to Nasdaq names may be attributed to some accounts jumping the gun on the rebalance to come on Friday’s close. With Texas Instruments Inc. replacing First Solar Inc. in the Nasdaq (Composite), the names in the Nasdaq will be sold to make room for Texas Instruments, which has a bigger market capitalization than First Solar,” wrote Elliot Spar, a strategist at Stifel Nicolaus.

For every two stocks falling three gained on the New York Stock Exchange, where 756 million shares traded. NYSE composite volume was about 3.5 billion, while Nasdaq composite volume was 1.6 billion.

Ahead of the opening bell, the Commerce Department said retail sales rose 0.8 percent in March, following revised increases in February and January.

The March climb in retail sales is key in figuring whether “consumers are continuing to support the economic recovery,” noted Bill Stone, chief investment strategist at PNC Asset Management Group.

A gauge of manufacturing in the New York region signaled a potential moderation in factory activity. The Federal Reserve Bank of New York’s index fell to 6.6 in April from 20.2 in March.

Citigroup Inc. shares rose 1.8 percent after the bank’s first-quarter profit topped Wall Street’s estimates, while revenue from its securities trading and investment-banking business fell.

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