NEW YORK, Aug 26 — US stocks edged higher today, with the S&P 500 rising to a fresh record on strong consumer data, but gains were capped as investors found few reasons to make major changes to their portfolios amid a long-running rally.
The S&P breached 2,000 for the first time today, and while it closed under that level it still ended at a new high. Including today’s move, both the Dow and the S&P have risen in 10 of the past 13 sessions, while the Nasdaq is up for 11 of the past 13 sessions. Much of the market’s recent gains have come on low volume, suggesting many traders may be reluctant to jump in at current levels.
“People aren’t going to do anything too aggressive until there’s some kind of catalyst, either positive or negative, and we may end up consolidating around 2,000 for a while,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. “We’re still in an uptrend, but it will be tough to move significantly higher from here.”
US consumer confidence rose more than expected in August, climbing to its highest since October 2007. Separately, US durable goods orders jumped 22.6 per cent in July, the biggest gain on record, though the number was skewed by strong international demand for aircraft. Excluding transportation, orders fell 0.8 per cent.
The market’s momentum is still considered intact, and the S&P’s price-to-earnings ratio is within historical norms, leading many analysts to believe stocks are not overvalued. Nonetheless, pronounced further gains may be a challenge amid potential headwinds such as a reduction in Federal Reserve stimulus and a simmering conflict between Ukraine and Russia.
The Dow Jones industrial average rose 48.2 points or 0.28 per cent, to 17,125.07, the S&P 500 gained 3.47 points or 0.17 per cent, to 2,001.39 and the Nasdaq Composite added 4.17 points or 0.09 per cent, to 4,561.51.
Best Buy Co Inc fell 6 per cent to US$30.07 (RM94.88)after the electronics retailer reported second-quarter revenue that missed expectations and forecast a drop in same-store sales in the second half of the year. DSW Inc rose 9.4 per cent to US$31.01 after adjusted earnings topped forecasts.
Digital Ally Inc extended its meteoric rise, climbing 25 per cent to US$15.59 on heavy volume. The recent fatal police shooting of an unarmed black teenager in Missouri has fueled interest in the company’s wearable camera, and the stock has almost quadrupled this month alone.
Amazon.com Inc late Monday agreed to buy live-streaming gaming network Twitch Interactive for about US$970 million in cash. Shares rose 0.7 per cent to US$336.50.
Kite Pharma Inc rose 16 per cent to US$25.87 a day after positive results in an early-stage study for an experimental cancer immunotherapy. Among other biotech names, Achillion Pharmaceuticals was up 3.4 per cent to US$11.15 while Regeneron Pharmaceuticals rose 0.8 per cent to US$350.78. — Reuters
