* Brokers upbeat on banks, stocks rise
* Minutes suggest Fed could keep rates ultra low
* Home builders fall on downgrade, rate worries
* Dow off 0.03 pct; S&P 500 up 0.2 pct; Nasdaq up 0.3 pct
* For up-to-the-minute market news, click []
(Adds context on Dow near 11,000 plus VIX and volume)
By Leah Schnurr
NEW YORK, April 6 (Reuters) - The S&P 500 and Nasdaq rose
modestly on Tuesday as the banking sector got a lift from
positive analyst comments, while minutes from the Federal
Reserve's last meeting eased concern over rising rates.
The minutes suggested the central bank could keep interest
rates at ultra-low levels longer than investors have
anticipated if the economy worsens. Lower rates support
financial shares, which have been at the center of the
market's year-long rally.
Bank of America <BAC.N> rose 2 percent to $18.49 and
JPMorgan Chase & Co <JPM.N> added 1.1 percent to $45.84 amid
the sector's strong gains. Wells Fargo Securities upgraded
large-cap U.S. banks, citing more clarity on asset-quality
trends. []
The three major U.S. stock indexes moved in a tight range,
but perked up after the release of the Fed minutes at 2 p.m.
(1800 GMT). For details, see []
"The crisis seems to be contained, but there is still
enough uncertainty and enough high unemployment that the Fed
looks like they will have loose monetary policy for an
extended period of time," said Doug Roberts, chief investment
strategist at Channel Capital Research.com, in Shrewsbury, New
Jersey.
The Dow continued to eye the psychologically important
11,000 level, coming within 13 points of the mark in afternoon
trading in a brief run into positive territory after the Fed's
minutes. The Dow last crossed that mark in September 2008.
By the close, though, the Dow's slim gain had evaporated,
and it ended just below break-even as Travelers Companies Inc
<TRV.N> fell after Sandler O'Neill cut its rating to "hold"
from "buy. The stock was down 1.4 percent at $52.59.
The Dow Jones industrial average <> eased 3.56 points,
or 0.03 percent, to finish at 10,969.99.
But the Standard & Poor's 500 Index <.SPX> added 2.00
points, or 0.17 percent, to 1,189.44. The Nasdaq Composite
Index <> rose 7.28 points, or 0.30 percent, to 2,436.81.
Earlier, the S&P 500 hit an 18-month intraday high at
1,191.80, and the Nasdaq touched a 19-month intraday high at
2,443.50.
Even though the broad market eked out a gain, some
technical indicators measuring momentum suggest the S&P 500
has been overbought for the last two weeks.
VIX LOWEST SINCE EARLY OCTOBER 2007
Meanwhile, Wall Street's fear gauge, the CBOE Volatility
Index <.VIX> or the VIX, fell 4.6 percent to end at 16.23, its
lowest close since Oct. 9, 2007. On that day, the S&P 500
closed at 1,565.15, its all-time closing high.
Regional banks' shares rose after Credit Suisse increased
its price target on two smaller banking companies, Regions
Financial Corp <RF.N> and Synovus Financial Corp <SNV.N>.
Regions Financial gained 4.4 percent to $8.55, while
Synovus Financial advanced 6.2 percent to $3.62. The KBW
regional banks index <.KRX> rose 3.1 percent, closing at its
highest level since early January 2009.
The Nasdaq garnered support from Amazon.com <AMZN.O>, up
3.1 percent at $135.56. The launch of Apple Inc's <AAPL.O>
iPad has stirred optimism the device could expand the market
for e-publishing, including Amazon.com's Kindle.
Home builders' stocks slid as rising Treasury yields
raised worries about higher mortgage rates, while KB Home
<KBH.N> fell 2.8 percent to $16.51 after Credit Suisse cut its
rating on the company's stock to "neutral" from "outperform."
Higher mortgage rates would pose a significant hurdle for
a recovery in the housing sector. The 10-year Treasury note's
yield reached 4 percent in intraday trade on Monday, though
its yield slipped to 3.96 percent on Tuesday as bargain
hunters stepped in to buy some debt and push prices up
slightly.
About 7.44 billion shares traded on the New York Stock
Exchange, the American Stock Exchange and Nasdaq, well below
last year's estimated daily average of 9.65 billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of 17 to 13, while on the Nasdaq, five stocks rose for
every four that fell.
(Reporting by Leah Schnurr; Additional reporting by Chuck
Mikolajzcak; Editing by Jan Paschal)
