S & P pulls back from last week's gains


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Posted Online: Feb. 11, 2013, 9:19 pm
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The Associated Press
NEW YORK (AP) — U.S. stocks drifted lower in thin trading Monday, pulling the Standard & Poor's 500 index back from a five-year high.

The broad-market index edged up slightly last week, enough to put it at its highest level since November 2007. With little in the way of market-moving news Monday, the S&P 500 slipped 0.92 of a point to close at 1,517.01.

Seven of the 10 industry groups within the S&P 500 dropped.

Now, with major indexes near record highs, many think the stock market's six-week rally is ready for a pause.

"The consensus seems to be that we're due for a correction," says Brian Gendreau, market strategist at Cetera Financial Group. "If you compound the increase we've had so far, this year would be the best year ever for stocks. And nobody thinks that that's going to happen."

The best year ever for stocks? For the S&P 500 index it was 1933, when the index rebounded 46 percent in the middle of the Great Depression.

In other trading Monday, the Dow Jones industrial average dropped 21.73 points to 13,971.24. UnitedHealth Group led the Dow lower, losing 62 cents to $57.12.

The Nasdaq composite fell 1.87 points to 3,192.00.

Trading volume was light, with 2.6 billion shares trading on the New York Stock Exchange. That compares with a two-month moving average of 3.4 billion.

Solid earnings reports have helped feed the rally in recent weeks. Of the 342 companies in the S&P index that reported results through last week, two out of every three have beat Wall Street's earnings estimates, according to research from Goldman Sachs.

Gendreau pointed to three reasons he believes that stocks still have room to run. Even after the market's recent surge, the typical stock looks fairly priced when compared to underlying earnings. Corporations keep finding ways to boost profits, which helps lure stock prices higher. And Americans looking for places to put their savings have few attractive alternatives.

"I'll go out on a limb and say that I think earnings growth, attractive valuations and pent-up demand will add up to a fairly strong year for equities," Gendreau said.

Apple's stock gained following reports over the weekend that the tech giant is developing a wristwatch-like gadget, a smart watch. The device would reportedly run the same operating system used for iPhones and iPads. Apple rose $4.95 to $479.93.

The stock market raced to a stunning start this year. A last-minute deal in Washington to avoid tax hikes and spending cuts known as the "fiscal cliff" eased fears that the budget cuts could lead the U.S. into a recession. Markets soared in relief.

The Dow and the S&P 500 have already gained more than 6 percent for the year. The Nasdaq is up 5.7 percent.

In the market for U.S. government bonds, the yield on the 10-year Treasury hovered at 1.95 percent on Monday, unchanged from late Friday. The yield began the year trading at 1.70 and has moved steadily higher as worries about a recession have dissipated, drawing traders out of the Treasury market, the world's biggest hiding spot.

















 



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  Today is Thursday, July 24, the 205th day of 2014. There are 160 days left in the year.

1864 -- 150 years ago: The Rev. R.J. Humphrey, once a clergyman in this city, was reported killed in a quarrel in New Orleans.
1889 -- 125 years ago: The Rock Island Citizens Improvement Association held a special meeting to consider the proposition of consolidating Rock Island and Moline.
1914 -- 100 years ago: The home of A. Freeman, 806 3rd Ave., was entered by a burglar while a circus parade was in progress and about $100 worth of jewelry and $5 in cash were taken.
1939 -- 75 years ago: The million dollar dredge, Rock Island, of the Rock Island district of United States engineers will be in this area this week to deepen the channel at the site of the new Rock Island-Davenport bridge.
1964 -- 50 years ago: The Argus "walked" to a 13-0 victory over American Container Corporation last night to clinch the championship of Rock Island's A Softball League at Northwest Douglas Park.
1989 -- 25 years ago: The Immediate Care Center emergency medical office at South Park Mall is moving back to United Medical Center on Sept. 1. After nearly six years in operation at the mall, Care Center employees are upset by UMC's decision. The center is used by 700 to 800 people each month.








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