Stocks rise but concern for economy deepens

Dow Jones: 12,403 (+ 8.10) Nasdaq: 2,783 (+ 21.54) SP 500: 1,326 (+ 5.22):US STOCKS rose for a second day yesterday in a choppy session, with technology and consumer discretionary stocks leading the way after upbeat earnings.

Sellers crowded around the SP 500’s 50-day moving average for a third day. The level, now just above 1,328, is gaining strength as technical resistance and could prevent any rebound in the benchmark.

The market’s ability to sustain an advance ebbed and flowed with developments in the foreign-exchange market and fears over Europe’s sovereign debt crisis.

The broad SP 500 was treading water throughout the morning after economic data failed to meet expectations, but once again found support once the euro stabilized against the US dollar.

The Nasdaq outperformed other major indexes after NetApp Inc’s stock was buoyed by strong results. The tech-heavy index also got a boost from shares of Microsoft Corp, up 2 per cent at $24.67 after a prominent investor said its chief executive should resign. The company’s board stood by its CEO.

The Dow Jones industrial average edged up 8.10 points, or 0.07 per cent, to 12,402.76. The Standard Poor’s 500 Index gained 5.22 points, or 0.40 per cent , to 1,325.69. The Nasdaq Composite Index rose 21.54 points, or 0.78 per cent, to 2,782.92.

The best-performing SP sector was consumer discretionary, helped by Tiffany Co, up 8.6 per cent at $76.04 after the luxury retailer reported its first-quarter results and raised its outlook.

Luxury handbag and accessories company Coach Inc rose 5 per cent to $63.68.

In a sign of rising concern about the economic outlook, Goldman Sachs cut its year-end target for the SP 500 by 3.33 per cent , to 1,450 from 1,500.

The lower target represents an upside of almost 10 per cent from current levels. The decision by Goldman Sachs to cut its SP 500 target, one of the highest on the Street, comes after UBS and Citigroup raised their earnings forecast for SP 500 companies last week, but kept their targets unchanged.

That indicates investors are starting to put a greater risk premium on the US stock market. – (Reuters)