Dow rises with Exxon but weak tech hits Nasdaq

NEW YORK (Reuters) - The Dow and the S&P 500 rose in choppy trading on Tuesday as higher oil prices lifted Exxon, while the Nasdaq fell after an analyst cut price targets on tech bellwethers such as Amazon.com.

Federal Reserve Chairman Ben Bernanke's comments appeared to reassure investors and helped offset the tech weakness.

Bernanke said the U.S. economy seemed to have enough momentum to avoid a "double-dip" recession, while European leaders were committed to ensuring the survival of the euro and had enough money to meet obligations of heavily indebted member nations.

Exxon Mobil Corp , up 2.1 percent at $60.56, gave the Dow its biggest boost. Exxon's stock advanced along with U.S. crude oil futures, which rose 61 cents to $72.05 a barrel.

"The markets are in a tug-of-war in the absence of any real news," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia. "We've heard some positive comments, but there is still concern about Europe and the Gulf of Mexico."

The Dow Jones industrial average <.DJI> was up 47.39 points, or 0.48 percent, at 9,863.88. The Standard & Poor's 500 Index <.SPX> was up 1.27 points, or 0.12 percent, at 1,051.74. But the Nasdaq Composite Index <.IXIC> was down 16.32 points, or 0.75 percent, at 2,157.57.

Also providing strength to the Dow was Caterpillar Inc , which rose 1.1 percent to $56.43 after affirming its long-term profit goal.

Investors remained anxious about debt levels in several euro-zone countries, as Portugal, Italy and Spain prepared to sell new bonds this week. It will be Spain's first sale since a credit rating downgrade.

"Europe remains No. 1 on the list of obstacles facing the economy," said Charles Lieberman, chief investment officer of Advisors Capital Management in Paramus, New Jersey.

"Investors don't have the confidence that Europe will be able to address its shortfalls, or that European growth can recover enough to help these economies."

Large-cap technology companies dragged the Nasdaq lower after Bank of America-Merrill Lynch cut price targets on several Internet stocks, citing uncertainty over earnings due to the dollar's gains against the euro since April. Amazon.com Inc fell 3 percent to $118.38.

Also weighing on tech was Microsoft Corp , which fell 1.3 percent to $24.95 after the Dow component said it planned to make a private offering of senior notes in a move to repay short-term debt.

The euro, used by investors in recent weeks as a barometer for euro-zone stability, gained 0.6 percent to $1.1986, a session high, a day after the currency hit its lowest level against the dollar since early 2006.

The U.S. stock market's increased volatility in recent weeks has made investors more sensitive, backing away at the first hint of selling pressure.

At midday, though, the CBOE Volatility Index <.VIX>, or VIX, was down 2.4 percent at 35.70.

Goldman Sachs Group Inc shed 1.6 percent to $136.40 after the banking company was subpoenaed by the commission probing the financial crisis.

Separately, Goldman lowered its view on the deepwater drilling sector to "neutral" from "attractive" on expectations that the moratorium on deepwater drilling would be extended and bring pressure on day rates and delayed price hikes.

U.S.-listed shares of Transocean Ltd slid 9.5 percent to $44.48.

McDonald's Corp , another Dow component, was up 0.6 percent at $67.15 after the world's biggest hamburger chain reported a stronger-than-expected rise in global same-store sales in May. McDonald's however, said a weak euro would hut its full-year profit.

(Reporting by Ryan Vlastelica; Editing by Jan Paschal)

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