US tech stocks slip as Apple drop weighs, but Dow up


(Updates to late afternoon)

By Ellis Mnyandu

NEW YORK, Nov 29 (Reuters) - U.S. technology shares fell on Tuesday as investors sold off such shares as Apple Computer Inc. following their recent run-up.

The drop in technology contrasted with gains on the Dow, which benefited from a slew of economic data pointing to strength in the economy.

The Dow Jones industrial average was up 18.50 points, or 0.17 percent, at 10,909.22. The Standard & Poor's 500 Index was up 2.69 points, or 0.21 percent, at 1,260.15. The technology-laced Nasdaq Composite Index was down 1.71 points, or 0.08 percent, at 2,237.66.

The Dow's strength stemmed from such industrial heavyweights as Boeing Co. , whose stock stock jumped 0.8 percent to $69.19 after data showed strong aircraft sales in October boosted durable goods orders.

Shares of another Dow component, Home Depot Inc. , the world's largest home improvement chain, rose 1 percent to $41.98, boosted by news of record homes sales last month.

Apple shares fell 1.8 percent to $68.43 on the Nasdaq, where it was the biggest drag, and pulled along with it Internet auctioneer eBay Inc. , which dropped 1.6 percent to $44.65.

Shares of Web search company Google Inc. dropped 4.1 percent to $406.21.

"We've kind of stalled here. Basically we've seen some profit-taking based on the gains we've had since mid-October," said Tom Schrader, managing director, U.S. equity trading, Legg Mason Wood Walker.

With the Nasdaq having risen to 4-1/2-year highs, analysts said technology stocks, along with financial stocks, were poised for a correction after the market's recent five-week rally.

"This is technically driven trading," said Joseph Luizzi, S&P 500 futures trader at the Chicago Mercantile Exchange. "This is continued profit-taking. Some of the bigger funds have been long since last quarter, and now they are taking some bets off the table in stock index futures. Tech stocks are taking the brunt of the declines today."

The Dow hit a nine-month high earlier in the session, while financial stocks were lower after strong housing data raised fears the U.S. Federal Reserve could continue hiking interest rates.

The data showing record new home sales suggested the Federal Reserve still had room to raise raises and pushed bond yields higher.

That hurt stocks sensitive to swings in interest rates like mortgage companies. Countrywide Financial Corp. slid 2.5 percent to $35.38.

Financial stocks losing ground included Citigroup Inc. , the world's largest financial services firm, whose shares slipped by 0.3 percent to $49.17, on the New York Stock Exchange.

Another economic report showed a larger-than-expected 3.4 percent jump in October durable goods orders on a surge in demand for aircraft. Economists had forecast orders for durable goods to rise by 1.1 percent. (Additional reporting by Doris Frankel)



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