Stocks Finish Mixed as Apple, Bank Shares Fall
The Dow Jones Industrial Average rose 19 points, or 0.1%, to 13,507 to boost the blue-chip index's winning streak to four sessions.
Hewlett-Packard shares jumped 4.9% after JPMorgan upgraded the stock to "neutral" from "underweight" and raised its price target to $21 from $15.
Sectors in the broader market traded mixed. The biggest sector decliner was technology, followed by services. Sector advancers included transportation, consumer cyclicals and consumer non-cyclicals.
Apple shares plunged 3.6% at final check, after opening down 4% on reports that the tech giant has cut orders for components for the iPhone 5 due to weaker-than-expected demand , people familiar with the situation told The Wall Street Journal .
Both Bank of America and UBS said Monday morning that this is "old news" from December and the stock has recovered from its lows.
Kevin Pleines, equity market analyst at Birinyi Associates, said that looking at the 20 instances since 2009 when Apple has opened down more than 2%, "there is no clear trend for the trading day. From the close after the gap down (today's close) the stock has had a tendency to trade higher over the next week and month."
JPMorgan Chase's board is expected to dock the 2012 bonuses of CEO Jamie Dimon and another top executive because of the "London Whale" trading debacle, the Journal reported, citing people close to the company.
"What we're really focused on is the banking institutions and what is the quality of their earnings, what is the quality of their revenues," said Keith Bliss, Cuttone director of sales and marketing.
He said two things are "vastly important" when looking at these companies. One is net interest margin. "Right now it's been shrinking for the big banks primarily because of the low interest rate environment and the flat yield curve that we've had for the last two years."
"The other is the loan-to-deposit ratio," Bliss said. Most banks, to make money, want to be at a 100% loan-to-deposit ratio. "Most of them are riding in the 70% category right now, which means they want to lend the money out, but they're just not finding good quality borrowers," he explained.