US blue chips surge after German EU vote

WASHINGTON: US blue chips rebounded but tech stocks fell Thursday after Germany's parliament approved a crucial EU bailout package and new US data gave the economy a slightly more positive tint.

The Dow Jones Industrial Average closed up 143.08 points (1.30 percent) at 11,153.98.

The broader S&P 500 added 9.34 (0.81 percent) to 1,160.40, but the tech-heavy Nasdaq Composite fell 10.82 (0.43 percent) to 2,480.76.

After a strong upward push in the morning, with the Dow's gains topping 2.0 percent, the markets pulled back.

"The combination of lingering concerns about Greek debt, Fed Chairman Ben Bernanke's warning of a 'national crisis,' and selling pressure in the tech sector eventually rained on the bulls' parade," said Andrea Kramer of Schaeffer's Investment Research.

Bank of America led the Dow push upward, adding 3.08 percent after losing nearly five percent Wednesday.

Tech stocks were dragged down by a 1.62 percent drop in Apple and a 3.16 percent fall in Amazon, a day after Amazon launched its assault on Apple's iPad with a new tablet that sells for less than half the iPad price.

Also hitting the Nasdaq was the 13.66 percent plunge in chipmaker AMD's shares, hit by the company's diminished forecast for the third quarter.

Chinese search engine Baidu took a 9.17 percent fall to $110.95, continuing its steady decline from a late July peak of $165.96.

The signals were mildly positive, with an upward revision in the second quarter GDP growth figure to 1.3 percent, and a sharp fall in weekly jobless benefits claims.

Meanwhile the German approval of the EU's July 21 plan gave hopes that it would pass all 17 eurozone states and Europe's leaders would move ahead with a confidence-building second bailout of Greece and also strengthen the region's banks.

"There are two schools of thought: those who think that each small step in Europe is good news and those who think that the small steps in Europe are not enough," said Gregori Volokhine of Meeschaert Capital Markets.

Bond prices rose. The 10-year Treasury bond yield was at 1.96 percent compared to 2.00 percent late Wednesday, while the 30-year yield fell to 3.00 percent from 3.09 percent.

Bond prices and yields move in opposite directions.

Copyright AFP (Agence France-Presse), 2011