S&P 500, Dow eke out all-time closing highs
The S&P 500 and Dow industrials scored meager gains Wednesday, but enough to extend their run into record territory and advance for a fourth session in a row.
However, the tech-heavy Nasdaq Composite Index took a breather following a five-session climb to end lower.
The S&P 500 index SPX, +0.01% edged up less than a point to a record close of 2,152.43, with its broad advance capped by declines in energy, off 0.7%, and consumer-discretionary stocks, 0.5% lower.
The Dow Jones Industrial Average DJIA, +0.13% rose 24.45 points, or 0.1%, to a record of 18,372.12, led by 1.2% rise in UnitedHealth Group Inc. UNH, +1.16%
Meanwhile, the Nasdaq COMP, -0.34% shed 17.09 points, or 0.3%, to finish at 5,005.73, after gaining more than 4% over the past week. The tech-laden index closed about 5.000 but its Wednesday losses pushed into negative territory for the year.
With the S&P 500 up nearly 8% over the past 10 trading days, “a pause here would be helpful,” said Frank Cappelleri, executive director of institutional sales at Instinet. “It would help alleviate the market’s stretched nature and possibly better prepare it for an extended move higher.”
Major indexes wove in and out of negative territory most of the session as investors awaited a spate of economic data and earnings later in the week.
The next two days are heavy on economic indicators with weekly jobless claims due on Thursday and inflation, retail sales and industrial output numbers scheduled for Friday. In the corporate sector, J.P. Morgan Chase & Co. JPM, -0.03% will report second-quarter earnings before the bell Thursday.
Bill Stone, chief investment strategist at PNC Asset Management Group, views Wednesday’s trade as “an essentially unchanged day while waiting on the Bank of England and the kickoff of big bank earnings.”
The Bank of England is expected to cut interest rates for the first time in more than seven years when it meets on Thursday.
“The consensus points to a rate cut, but it will be interesting to see how the market responds if it didn’t [cut rates],” said Stone.
The economic uncertainty caused by Brexit—the U.K. vote to leave the European Union—has been a key driver of the recent push to record levels, raising an expectation for economic disruption in Europe and the U.K. that lured investors to U.S. assets, said Mohannad Aama, managing director at Beam Capital Management.
And while economic and financial fundamentals may not justify further gains, record-low sovereign-bond yields and a cautious a Federal Reserve will likely keep values elevated as investors have few alternatives, Aama added.
“All these factors push you into U.S. stocks and it’s unclear what was the hair that broke the camel’s back that made us break through this S&P level,” he said. “But for now, it looks like we have a few more points to go.”
However, some strategists raised concerns that the recent rally has been led by defensive plays like utilities and telecom shares.
“Usually, market rallies driven by defensive sectors don’t tend to last very long. We need to see leadership by sectors like financials or technology to really count on this rally having legs,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab.
Stocks got a slight bump from the Fed’s beige book report, which indicated that the U.S. economy is holding steady although consumption may be softening. The beige book is an anecdotal survey of economic conditions in the U. S.compiled by the Fed’s regional banks.
“It’s the same old, same old story with the economy moving ahead at a moderate pace,” said Bob Pavlik, chief market strategist at Boston Private Wealth LLC. But Pavlik believes second-quarter earnings will be better-than expected and that will help to push the market higher eventually.
In other economic news on Wednesday, U.S. import prices climbed 0.2% in June. And, the U.S. ran a $6 billion budget surplus in June.
Fed speakers: On Wednesday, Dallas Fed President Rob Kaplan was sanguine about the outlook for the U.S. consumer, speaking at an event run by the World Affairs Council of Greater Houston.
At 6 p.m. Eastern, Philadelphia Fed President Harker was expected to give a speech on the economic outlook at the 2016 World Class Summit in Philadelphia.
Movers and shakers: Shares of Juno Therapeutics Inc. JUNO, +9.46% rallied 9.5% after the drugmaker late Tuesday said it would resume a drug trial of a potential leukemia treatment. The trial had been placed on clinical hold last week following two patient deaths.
SemiLEDS Corp. LEDS, -16.26% tanked 16% after the LED chips maker late Tuesday said third-quarter revenue slumped 18% and that is loss widened to $3.3 million.
Amazon.com Inc. AMZN, -0.08% shed 0.8% even after Benchmark lifted the price target on the stock to $915 from $750.
Other markets: Asian stocks closed mostly higher, but were off intraday highs after the Japanese government denied it would use “helicopter money” to boost the economy.
Europe’s main stock benchmark rose for a fifth straight session, getting closer to erasing its entire post-Brexit loss.
The S&P 500 and Dow industrials scored meager gains Wednesday, but enough to extend their run into record territory and advance for a fourth session in a row.
However, the tech-heavy Nasdaq Composite Index took a breather following a five-session climb to end lower.
The S&P 500 index SPX, +0.01% edged up less than a point to a record close of 2,152.43, with its broad advance capped by declines in energy, off 0.7%, and consumer-discretionary stocks, 0.5% lower.
The Dow Jones Industrial Average DJIA, +0.13% rose 24.45 points, or 0.1%, to a record of 18,372.12, led by 1.2% rise in UnitedHealth Group Inc. UNH, +1.16%
Meanwhile, the Nasdaq COMP, -0.34% shed 17.09 points, or 0.3%, to finish at 5,005.73, after gaining more than 4% over the past week. The tech-laden index closed about 5.000 but its Wednesday losses pushed into negative territory for the year.
With the S&P 500 up nearly 8% over the past 10 trading days, “a pause here would be helpful,” said Frank Cappelleri, executive director of institutional sales at Instinet. “It would help alleviate the market’s stretched nature and possibly better prepare it for an extended move higher.”
Major indexes wove in and out of negative territory most of the session as investors awaited a spate of economic data and earnings later in the week.
The next two days are heavy on economic indicators with weekly jobless claims due on Thursday and inflation, retail sales and industrial output numbers scheduled for Friday. In the corporate sector, J.P. Morgan Chase & Co. JPM, -0.03% will report second-quarter earnings before the bell Thursday.
Bill Stone, chief investment strategist at PNC Asset Management Group, views Wednesday’s trade as “an essentially unchanged day while waiting on the Bank of England and the kickoff of big bank earnings.”
The Bank of England is expected to cut interest rates for the first time in more than seven years when it meets on Thursday.
“The consensus points to a rate cut, but it will be interesting to see how the market responds if it didn’t [cut rates],” said Stone.
The economic uncertainty caused by Brexit—the U.K. vote to leave the European Union—has been a key driver of the recent push to record levels, raising an expectation for economic disruption in Europe and the U.K. that lured investors to U.S. assets, said Mohannad Aama, managing director at Beam Capital Management.
And while economic and financial fundamentals may not justify further gains, record-low sovereign-bond yields and a cautious a Federal Reserve will likely keep values elevated as investors have few alternatives, Aama added.
“All these factors push you into U.S. stocks and it’s unclear what was the hair that broke the camel’s back that made us break through this S&P level,” he said. “But for now, it looks like we have a few more points to go.”
However, some strategists raised concerns that the recent rally has been led by defensive plays like utilities and telecom shares.
“Usually, market rallies driven by defensive sectors don’t tend to last very long. We need to see leadership by sectors like financials or technology to really count on this rally having legs,” said Jeffrey Kleintop, chief global investment strategist at Charles Schwab.
Stocks got a slight bump from the Fed’s beige book report, which indicated that the U.S. economy is holding steady although consumption may be softening. The beige book is an anecdotal survey of economic conditions in the U. S.compiled by the Fed’s regional banks.
“It’s the same old, same old story with the economy moving ahead at a moderate pace,” said Bob Pavlik, chief market strategist at Boston Private Wealth LLC. But Pavlik believes second-quarter earnings will be better-than expected and that will help to push the market higher eventually.
In other economic news on Wednesday, U.S. import prices climbed 0.2% in June. And, the U.S. ran a $6 billion budget surplus in June.
Fed speakers: On Wednesday, Dallas Fed President Rob Kaplan was sanguine about the outlook for the U.S. consumer, speaking at an event run by the World Affairs Council of Greater Houston.
At 6 p.m. Eastern, Philadelphia Fed President Harker was expected to give a speech on the economic outlook at the 2016 World Class Summit in Philadelphia.
Movers and shakers: Shares of Juno Therapeutics Inc. JUNO, +9.46% rallied 9.5% after the drugmaker late Tuesday said it would resume a drug trial of a potential leukemia treatment. The trial had been placed on clinical hold last week following two patient deaths.
SemiLEDS Corp. LEDS, -16.26% tanked 16% after the LED chips maker late Tuesday said third-quarter revenue slumped 18% and that is loss widened to $3.3 million.
Amazon.com Inc. AMZN, -0.08% shed 0.8% even after Benchmark lifted the price target on the stock to $915 from $750.
Other markets: Asian stocks closed mostly higher, but were off intraday highs after the Japanese government denied it would use “helicopter money” to boost the economy.
Europe’s main stock benchmark rose for a fifth straight session, getting closer to erasing its entire post-Brexit loss.
