Wall Street cuts losses; Broadcom deal boosts Nasdaq

US stocks trimmed early losses to trade flat on Monday as European bank shares recovered and technology stocks regained their footing.

New York: US stocks trimmed early losses to trade flat on Monday as European bank shares recovered and technology stocks regained their footing.

The market opened weakly with all three major indexes down more than 1 percent on worries of a credit rating downgrade of French banks and the lack of a solution to Greece's debt problem.

"The move this morning is a case of investors responding very quickly. The bottom line is that the S&P is a good global hedge, and we saw something of a recovery in European banks," said Andrew Wilkinson, senior market analyst at Interactive Brokers Group in Greenwich, Connecticut.

The Dow Jones industrial average was down 21.60 points, or 0.20 percent, at 10,970.53. The Standard & Poor's 500 Index was up 0.16 points, or 0.01 percent, at 1,154.39. The Nasdaq Composite Index was up 11.79 points, or 0.48 percent, at 2,479.78.

Gains in the tech heavy Nasdaq index were boosted by NetLogic Microsystems Inc, which jumped 50 percent to USD 47.88 after wireless chipmaker Broadcom Corp agreed to buy the company for about USD 3.7 billion.

Broadcom will pay USD 50 per share for each NetLogic share, a premium of 57 percent over NetLogic's Friday close of USD 31.91 on Nasdaq. Broadcom shares were down 0.8 percent at USD 33.17.

France's top banks are bracing themselves for a likely credit rating downgrade from Moody's, sources close to the situation said, further complicating their efforts to assure investors they are riding out the tensions in funding markets.

Concerns that the credit crisis in Europe may threaten to spill over into US banks have been pressuring Wall Street for several months, sending shares of major banks to their historical lows in recent weeks.

Investors were also unsettled by the failure of the weekend's meeting of finance ministers from the Group of Seven industrialized nations to come up with any fresh proposals for boosting global growth.

Bureau Report

Zee News App: Read latest news of India and world, bollywood news, business updates, cricket scores, etc. Download the Zee news app now to keep up with daily breaking news and live news event coverage.