Dow, S&P 500 end at record highs again; Nasdaq slips

Tags: Stock Market
The Dow and the S&P 500 eked out record closing highs again on Tuesday, while the Nasdaq resumed its recent slide, dragged down by shares of Cisco.

The S&P 500 briefly rose above 1,900 for the first time early in the session, but quickly gave back some of its gains. In contrast, the Russell 2000 index of small-cap stocks fell 1.1%.

"We didn't see much of a followthrough from yesterday's runup. That started a discussion as to whether the economy was going to bounce back as strongly as some folks had been expecting," said Bucky Hellwig, senior vice president of BB&T Wealth Management in Birmingham, Alabama.

"We've eked out a gain in the broad averages but continue to see weakness in the Nasdaq and small caps so that divergence has got some investors concerned. What you see is a smaller group of stocks participating in the rally."

Homebuilders' shares gained and the common stock of mortgage finance giants Fannie Mae and Freddie Mac jumped as Federal Housing Finance Agency Director Mel Watt laid out new policies that could make it easier for many Americans to obtain mortgages. Fannie Mae jumped 7.8% to $4.57 while Freddie Mac advanced 6.9% to $4.49.

Cisco Systems Inc, set to report results on Wednesday, was the biggest drag on the Nasdaq. The stock slid1.4% to end at $22.86.

The Dow Jones industrial average rose 19.97 points or 0.12%, to 16,715.44, its third straight record closing high. The Dow also set an intraday record at 16,735.51.

The S&P 500 gained just 0.8 of a point or 0.04%, to 1,897.45, its second straight record closing high. The S&P 500 also advanced during the session to 1,902.17, a lifetime intraday high.

The Nasdaq Composite dropped 13.69 points or 0.33%, to 4,130.165.

The drop in the Russell 2000 came a day after the index scored its biggest daily percentage gain since early March. At its session low on Friday, the index was down exactly 10% from the intraday record high set in early March.

The Dow Jones Transportation Average rose 0.5% after hitting another intraday record high, which some analysts say points to upbeat prospects for the US economy.

More developments on the deal front enhanced the outlook for stocks. Keurig Green Mountain Inc was the S&P 500's biggest percentage gainer, up 7.6% at $119.07. The stock climbed after Coca-Cola Co said it will raise its stake in the company, the maker of the popular Keurig one-cup coffee brewer, to 16% from 10%. Coca-Cola rose 0.7% to $41.11.

In other deal news, DirecTV shares slipped 1.2% to $86.08 a day after sources told Reuters that AT&T Inc was in active talks to buy the company in a deal that could be worth close to $50 billion. AT&T's stock dropped 1% to $36.20 and was the biggest drag on the S&P 500.

Among homebuilders, the stock of D.R. Horton Inc rose 2.2% to $23.07. The PHLX housing sector index gained 0.2%.

Data did little to change the view that the US economy is poised for faster growth this quarter. Retail sales rose 0.1% in April, less than expected, though the March reading was revised upward.

About 5.5 billion shares changed hands on US exchanges, below the 6.1 billion average for the month to date, according to data from BATS Global Markets.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Faith is the opium of the masses, so Indians get addicted

    India is a nation of 1.27 billion. Let that number sink in, with all its zeroes. That’s a lot of people.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

M S Swaminathan

Public good research in agriculture

Public good research in agriculture is designed to promote risk ...

Zehra Naqvi

To hell and back

Here is a book that makes you wish there were ...

Bubbles Sabharwal

When your real & reel life heroes are the same

ALL the world’s a stage and we all are merely ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture