IBM helps Dow but chip sector hurts Nasdaq

NEW YORK (Reuters) - The Dow rebounded on Wednesday with a jump in IBM's stock on its 2015 outlook, but the Nasdaq fell as a weaker-than-expected earnings target from Texas Instruments weighed on the chip sector.

Rising oil prices dragged on the broader market on the two-year anniversary of stocks' bull run from the S&P 500's 12-1/2-year closing low of 676.53, which was sparked by the financial crisis.

The Dow bounced back from a session low and reclaimed a slim gain as buyers snapped up shares of International Business Machines Corp , driving it up 2.7 percent to $166.59. Earlier, IBM climbed to an intraday high of $167.72 after a host of analysts raised their target price on the stock. A day earlier, the tech giant reaffirmed its 2015 earnings target.

But the Nasdaq couldn't overcome the drag from the chip makers, with an index of semiconductor shares <.SOX> down 2.3 percent and trading below its 50-day moving average in another sign of weakness for the sector.

Texas Instruments shares fell 2.7 percent to $34.87, a day after the company gave a current-quarter earnings estimate below Wall Street's estimates.

Tech shares also felt the weight of Finisar Corp , which plummeted 36.1 percent to $25.62 after the network equipment maker forecast a dismal fourth quarter, blaming an inventory pile-up by telecommunications equipment makers in China.

Techs "are losing steam ... there's some movement going on in the space that's affecting the market," said Giri Cherukuri, head trader at OakBrook Investments LLC, which oversees $1.3 billion in Lisle, Illinois.

"Several names that have run up a lot are coming down," he said.

Finisar is still up 100 percent since the start of September.

Oil prices resumed their upward trend, reinforcing worries that high energy costs could dampen economic growth.

The Dow Jones industrial average <.DJI> was up 5.56 points, or 0.05 percent, at 12,219.94. But The Standard & Poor's 500 Index <.SPX> was down 2.34 points, or 0.18 percent, at 1,319.48. The Nasdaq Composite Index <.IXIC> was down 15.14 points, or 0.55 percent, at 2,750.63.

Brent crude gained $2.65 to $115.71 a barrel.

Libyan forces loyal to Muammar Gaddafi surrounded rebels in the western city of Zawiyah with tanks and snipers in the main square, witnesses said.

In Portugal, the government's two-year cost of borrowing hit the highest level since it joined the euro in a bond auction on Wednesday, and an official said yields were unsustainable in the long run without Europe-wide action.

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal)

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