WALL STREET : DJIA Turned Away by 12K

Chip Stocks Weigh on Nasdaq
Stocks jolted higher out of the gate this morning, as a round of corporate merger-and-acquisition activity provided a much-needed catalyst for the beaten-down bulls. With everyone from Honeywell (HON) to Wendy's Arby's Group (WEN) striking deals, traders priced in some fresh optimism over the U.S. business climate, sending the Dow Jones Industrial Average (DJIA) back above 12,000 in early trading. However, investors curbed their enthusiasm around midday, after Standard & Poor's slashed its rating on Greek debt to within one notch of default status. Chip stocks also dragged on sentiment, after analysts at Baird predicted "a sharp deceleration in semiconductor order trends" during the second quarter. Against this murky backdrop, stocks started the week on a rather indecisive note, with the major market indexes finishing on both sides of the breakeven line today.

After climbing as high as 12,011.66, the Dow Jones Industrial Average (DJIA – 11,952.97) settled for its second straight finish beneath 12,000. The Dow added just 1.06 points today, even as 19 of its 30 components trekked higher. Pfizer (PFE) led the bullish contingent with a 1.7% advance, while Caterpillar (CAT) and Hewlett-Packard (HPQ) shed 1.4% apiece to pace the 11 laggards. Today's barely perceptible gain marks only the second positive session for the Dow during the month of June.

The S&P 500 Index (SPX – 1,271.83) also ended higher, but only just. The SPX tacked on 0.9 point, or 0.07%, holding steady above support at its 40-week moving average. On the other hand, the Nasdaq Composite (COMP – 2,639.69) diverged from its peers by slipping to a loss of 4 points, or 0.2%, after finding an intraday ceiling near its own 40-week trendline.

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