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Technology, bank stocks drag US market lower
US stocks move lower as technology names drag down the market; BofA news hits bank stocks
By KEN SWEET
Associated Press
2014-04-29 03:22 AM

NEW YORK (AP) -- Stocks mostly fell Monday afternoon, led by declines in technology and bank stocks, as investors' excitement about a potential blockbuster pharmaceutical deal was snuffed out.

KEEPING SCORE: The Standard & Poor's 500 index was down two points, or 0.2 percent, to 1,860 as of 3 p.m. (1900 GMT). The Dow Jones industrial average edged up 21 points, or 0.1 percent, to 16,382 and the Nasdaq composite sank 25 points, or 0.6 percent, to 4,049.

BANK WORRIES: Bank of America sank 99 cents, or 6 percent, to $14.97 after it unexpectedly announced it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.

Other banks also fell. Goldman Sachs fell 2 percent, while JPMorgan Chase and Citigroup were down roughly 1 percent.

PFIZER COURTS ASTRAZENECA: Pfizer renewed its push to buy British drug company AstraZeneca for $100 billion. The deal would be the latest big merger in the drug industry in recent weeks, if it happens. AstraZeneca jumped $7.62, or 11 percent, to $76.23. Pfizer rose $1.14, or 4 percent, to $31.89.

MORE PAIN FOR TECH: The Nasdaq took the brunt of the afternoon selling, as investors again ditched formerly highflying Internet and biotech stocks. Amazon fell $9.13, or 3 percent, to $294.70 after dropping 10 percent on Friday. Netflix lost $16, or 5 percent, to $305.97 and Facebook dropped $1.70, or 3 percent, to $56.

After snapping up tech stocks last year, investors have spent most of 2014 punishing them. The Nasdaq is down 3.6 percent in April, compared with a 1 percent fall in the S&P 500 and 0.8 percent decline in the Dow. The Nasdaq is on pace for its worst month since October 2012.

"The froth is finally burning off in some of these sectors like technology," said Quincy Krosby, a market strategist at Prudential Financial. "Investors want to rely more on fundamentals, and it's hard to justify some of these valuations."

FED WATCH: The Fed will start a two-day policy meeting on Tuesday. The central bank is expected to further dial back its economic stimulus by reducing its monthly bond purchases to $45 billion. Those monthly purchases, which totaled $85 billion in December, have helped hold down long-term interest rates for consumers and businesses.

UKRAINE: Investors are watching the tensions between Ukraine and Russia. The White House announced additional sanctions against seven Russian officials and several companies in response to Russia's annexation of Crimea. In a separate development, the mayor of Ukraine's second-largest city was shot and wounded by an unidentified gunman.

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