Stocks Weaken as Apple Leads Tech Lower

By Rita Nazareth - Sep 26, 2011 9:59 PM GMT+0700

U.S. stocks advanced, following the biggest weekly decline for the Dow Jones Industrial Average since October 2008, on speculation European leaders will act to prevent the region’s debt crisis from getting worse.

U.S. stocks recovered after briefly erasing an early rally, as Apple Inc. led technology shares lower after an analyst said it is cutting orders for iPad parts and data showed new-home sales fell to a six-month low.

The Standard & Poor’s 500 Index added 0.4 percent to 1,140.62 at 10:58 a.m. in New York, after dropping as much as 0.5 percent earlier. The Dow added 78.22 points, or 0.7 percent, to 10,849.70 today.

“This market is starting to get cheap,” Jack Ablin, who helps oversee $55 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview. “If we don’t see any chips falling, investors will be pleased.”

U.S. stocks fell last week as the Federal Reserve said risks to the economy have increased and concern grew that policy makers will fail to spur growth. Equities rebounded on Sept. 23, following a four-day rout that drove the S&P 500 down 7.1 percent, amid speculation European governments will act to prevent a financial crisis.

Last week’s rout erased $1 trillion from U.S. equities amid concern Greek insolvency is inevitable and Europe can’t contain the damage. The S&P 500 last week was trading at 12.4 times earnings in the past 12 months, 4.4 percent below its average valuation at the lowest point during the last nine bear markets, according to data compiled by Bloomberg.

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net