Stocks little changed as Dow advances
NEW YORK — The Standard & Poor’s 500 Index slipped Tuesday, halting a four-day streak of record closes, as investors weighed equity valuations. The Dow Jones Industrial Average closed at an all-time high.
EBay dropped 2.7 percent after saying David Marcus will step down as the head of its PayPal unit to join Facebook. Facebook rallied 4.6 percent to the highest since March. RadioShack plunged 10 percent after reporting a wider quarterly loss.
Molson Coors Brewing jumped 5.4 percent for the biggest gain in the equities benchmark. Electronic Arts added 2.3 percent after disclosing release dates for new games.
The S&P 500 fell less than one point to 1,950.79 at 4 p.m. in New York, trimming an earlier decline of 0.3 percent. The Dow average added 2.82 points, or less than 0.1 percent, to 16,945.92, erasing earlier declines in the final hour of trading to extend a record. About 5.2 billion shares changed hands on U.S. exchanges, 17 percent below the three-month average.
“It shouldn’t be a shock to anyone that we’re seeing softness after a blistering recovery,” Chad Morganlander, a fund manager at Stifel Nicolaus, which oversees $160 billion, from Florham Park, N.J., said. “This is a temporary reprieve from a market that’s been seeing highs.”
The S&P 500 has advanced 7.4 percent since a low on April 11 as data showed the U.S. economy is recovering from the impact of extreme weather earlier this year. The gauge rallied last week after the European Central Bank announced a stimulus package and American jobs data topped estimates.
The equities benchmark trades at 16.5 times the projected earnings of its members, up from a multiple of 14.8 times at the beginning of February. The gauge’s 14-day relative strength index was 73.7 on Monday, above the 70 reading that some investors see as a signal to sell.
Profit for companies on the gauge will probably climb 7.4 percent in 2014, analysts predict. That’s down from a January projection for growth of 9.7 percent. Sales probably gained 3.5 percent this year on average, according to estimates compiled by Bloomberg.
The S&P 500 has risen for nearly 32 months without a decline of 10 percent or more, versus the average of 18 months since 1945, according to data from S&P Capital IQ strategist Sam Stovall. In 2011, the S&P 500 index dipped as much as 19 percent from late April through early October, the closest the market’s come to ending the bull market that began in 2009.
Three rounds of Federal Reserve bond buying have helped propel the S&P 500 higher by as much as 188 percent from its bear-market low in March 2009. Fed officials are watching the labor market as they move to complete the stimulus program late this year.
Data released on Tuesday showed U.S. wholesale inventories increased 1.1 percent in April, more than the 0.6 percent gain estimated by economists. A separate report showed job openings rose to 4.5 million in April from 4.17 million in March.