US STOCKS-Banks weigh down Wall St, uptrend intact

* Intel shares rise after UBS upgrade

* Financial shares weigh following a stellar week

* Indexes: S&P off 0.3 pct, Dow down 0.4 pct, Nasdaq flat

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday, changes byline)

By Rodrigo Campos

NEW YORK, Nov 8 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) fell on Monday
after hitting two-year highs last week, weighed by financial
shares, one of the stellar sectors in the last few sessions.

The S&P financial index (.GSPF: ) fell 0.8 percent to lead
declines, following a 6.9 percent weekly advance.

The broad S&P 500 has risen five straight weeks and nine of
the last 10. With those gains, most S&P sectors are seen as
overbought, leaving the market technically susceptible to a
decline. Despite Monday’s dip, the uptrend was still in place.

“Every time you make new highs it doesn’t necessarily mean
you’re going higher,” said John Schlitz, chief U.S. market
technician at Instinet in New York.

“But you keep the uptrend alive, and that theoretically
keeps demand there when you get a pressure-relieving
pullback.”

The Dow Jones industrial average (.DJI: ) shed 41.10 points,
or 0.36 percent, to 11,402.98. The Standard & Poor’s 500 Index
(.SPX: ) dipped 3.89 points, or 0.32 percent, to 1,221.96. The
Nasdaq Composite Index (.IXIC: ) gained 0.38 points, or 0.01
percent, to 2,579.36.

The S&P 500 faces strong resistance around 1,228, which
would retrace 61.8 percent of the decline between its historic
highs in 2007 and the 12-year low in March 2009. This is one of
the so-called Fibonacci retracements that chartists widely
follow and indicate buying and selling points.

Back in April, a first attempt to breach that level failed
and preceded a decline that took the index to its 2010 low in
early July.

“I’m sure people are watching the 1,228 level. We stopped
at 1,227 on Friday, and that number will probably stay in play
for a little while,” said Schlitz.

Declines in bank shares could go beyond profit-taking from
last week’s gains. A pledge from the U.S. Federal Reserve to
keep interest rates near record lows was viewed as hurting bank
profits.

“Negative interest rates are not healthy for financial
stocks, and banks still have a lot of bad debt on their books,”
said Bruce Bittles, chief investment strategist at Robert W.
Baird & Co in Nashville.

“I would think (financials) would continue to underperform
as opposed to the tech sector, where balance sheets are a lot
more healthy and earnings growth is a lot more visible.”

Gains in technology stocks, including Apple Inc (Read more about Apple stock future.) (AAPL.O: ),
up 0.7 percent to $319.14, and the semiconductor sector (.SOX: ),
up 0.3 percent, kept the Nasdaq near breakeven throughout the
morning.

In corporate news, AOL Inc (AOL.N: ) is exploring strategic
options, including a tie-up with Yahoo Inc (YHOO.O: ), and has
hired financial advisers, the Wall Street Journal reported,
citing sources. AOL added 2.3 percent to $25.49. For details,
see [ID:nSGE6A7068]

Helping Nasdaq, Intel Corp (INTC.O: ) added 1 percent to
$21.45 after UBS raised its rating on the stock to “buy” from
“neutral” and estimated that the semiconductor sector will see
another couple of quarters of inventory adjustment globally.
[ID:nWNAB0678]
(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

US STOCKS-Banks weigh down Wall St, uptrend intact