Wall Street: Monday mid-session

13 April 2012

WALL STREET stocks were weaker today as investors took a breather from last week's long-time highs and focused on the threat of rising interest rates.

After upbeat news and analysis on the rebound in technology spending, shares of IBM and Intel helped keep the Dow close from falling further.

Stocks have soared in the past seven months as the Federal Reserve has helped pump money into the economy with short-term interest rates at 1%, a 45-year low. As the economy recovers and more Americans find work, investors are expecting the Fed to start moving rates higher at some stage next year to head off the threat of inflation. Raising rates would probably dampen consumer and company spending as the cost of borrowing rises.

The Dow Jones Industrial Average was down 24 points, or 0.2%, at 9,786. The broader Standard & Poor's 500 Index fell 3 points, or 0.3%, to 1,050 and the technology-heavy Nasdaq Composite Index dropped 7 points, or 0.4%, to 1,964.

IBM rose $1.50, or 1.7%, to $89.78 after a report in Barron's tipped the computer giant as one of the beneficiaries of next year's expected recovery in corporate technology spending.

Intel rose 14 cents to $34.00 after broker J.P. Morgan upgraded the world's largest semiconductor maker to 'overweight.'

Shares of Circuit City were 65 cents, or 6.2%, better at $11.28 after brokerage Jefferies raised its investment rating on the stock to 'buy.'

Printer R.R. Donnelley eased $1.04, or 3.7%, to $26.99 after it said on Sunday it would buy Canadian commercial printer Moore Wallace for $2.8bn and debt, extending its range of products.

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