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US STOCKS-Nasdaq lower as techs sell off; defensives gain

Published 06/12/2009, 11:54 AM
Updated 06/12/2009, 12:00 PM
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* Big-cap tech shares weigh on Nasdaq

* Defensive stocks shine after mixed economic data

* Indexes off: S&P 500 0.5 pct, Dow 0.3, Nasdaq 1.2 (Updates to late morning)

By Edward Krudy

NEW YORK, June 12 (Reuters) - Technology shares fell on Friday after disappointing results from National Semiconductor, but a rise in defensive stocks, like healthcare, cushioned losses in the Dow and S&P 500.

The Nasdaq took the brunt of the selling, led by bellwethers such as Qualcomm Inc, which was down 1 percent to $45.50, and Apple Inc, off 2.3 percent to $136.67.

Chipmaker National Semiconductor Corp reported a quarterly loss late Thursday, but offered a sales forecast that beat expectations. Shares slid 7.3 percent to $13.41. The PHLX semiconductor index fell 3.2 percent.

The Dow Jones industrial average dropped 23.36 points, or 0.27 percent, to 8,747.92. The Standard & Poor's 500 Index fell 4.92 points, or 0.52 percent, to 939.97. The Nasdaq Composite Index lost 23.06 points, or 1.24 percent, to 1,839.31.

"Defensives appear to be doing a little bit better today ... and the stock sectors performing especially well since the March 9 bottoms are the ones underperforming. So you are just seeing an intraday move in sector rotation," said Michael Koskuba, portfolio manager and analyst at Victory Capital Management in New York.

"Stocks are trading on what the underlying commodities are doing, so it stands to reason that energy and materials stocks would sell off a little bit."

Stocks tumbled early after a sharp retreat in commodity prices, but buying in shares of companies seen as better able to withstand an uncertain economy helped trim losses.

The Reuters/University of Michigan Surveys of Consumers showing consumers were worried about inflation and labor market uncertainty added to the early stumble.

Stocks such as Merck & Co Inc and Pfizer Inc rose as investors rotated money out the recent market winners, including healthcare, energy and technology. Merck was up 2.3 percent to $26.80, while Pfizer Inc rose 2 percent to $14.92.

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