By Dow Jones Business News,
May 13, 2014, 02:23:00 PM EDT
By Tomi Kilgore
U.S. stocks were little changed Tuesday, with the Dow industrials and the S&P 500 index pulling back after earlier
hitting all-time intraday highs.
Small-capitalization and technology stocks retreated after bouncing sharply the last couple of sessions.
The Dow Jones Industrial Average edged up 15 points, or 0.1%, to 16711 after hitting an intraday high of 16735.51.
The advance put the Dow on course for a fifth-straight gain and a third-straight record close.
The S&P 500 was virtually flat at 1897. It reached an intraday high of 1902.18, topping the previous intraday
record of 1897.28 hit on April 4.
The technology-heavy Nasdaq Composite Index lost 12 points, or 0.3%, to 4132, after climbing 2.3% in the previous
The Russell 2000 index of small-cap stocks declined 0.8%. The index had fallen 9.2% from a record high on March 4
to a three-month low on Thursday, before running up 3.3% through Monday.
Gary Flam, portfolio manager at Bel Air Investment Advisors, which has $7 billion in assets under advisement, said
the underperformance of small-caps and other high-growth momentum stocks is only concerning if it is accompanied by
other factors, such as narrowing participation in the broader market's gains. But that's currently not the case, he
"It's not something that I'm worried about at the moment," Mr. Flam said. "But it's something I'm monitoring."
Although the S&P 500 is hitting all-time highs, "we're sensing zero euphoria" among investors, said Jim Russell,
senior equity strategist at U.S. Bank Wealth Management, with $120 billion in assets under management.
On Tuesday, data showed that retail sales for April barely rose, missing forecasts, while March's increase was
revised higher. In addition, import prices for April declined, versus expectations of a slight increase, and business
inventories for March rose in line with forecasts.
The yield on the 10-year Treasury note slipped to 2.614% from 2.657% late Monday.
Although the economy isn't as strong as he would like to see, U.S. Bank's Mr. Russell believes it's strong enough
to support the market's gains.
"The fundamentals are justifying the record highs," Mr. Russell said. "We believe we have a sustainable recovery
He added that corporate earnings have also provided fuel to the market's rise. With 91% of S&P 500 companies having
reported first-quarter results, aggregate earnings per share are now expected to be up 2.2% from year-ago levels,
according to FactSet, versus expectations of a 1.2% decline at the end of March. Revenue is seen growing 2.8% from last
year, according to FactSet.
"We're finishing first-quarter earnings season, and I think the markets can claim victory in leaping over a low
hurdle, in terms of expectations, " Mr. Russell said.
European markets rose, with the Stoxx Europe 600 rising 0.3% to the highest close since January 2008, following a
report in The Wall Street Journal that Germany's Bundesbank is open to an array of stimulus measures by the European
Central Bank in June.
The euro fell against the dollar for a fifth-straight session.
In Asia, China's Shanghai Composite slipped 0.1% following downbeat housing data, while Japan's Nikkei Stock
Average rallied 2% following upbeat earnings news.
Gold futures inched lower by less than 0.1% to $1295.60 an ounce in choppy trading, while crude-oil futures
advanced 0.8% to $101.36 a barrel.
Among stock movers, DirecTV eased 0.7%, erasing earlier gains, after The Wall Street Journal reported AT&T is close
to sealing a buyout that would value the satellite-television provider at nearly $50 billion. Shares of Dow component
AT&T lost 1.2%.
Elizabeth Arden slumped 22% after the beauty-products company reported late Monday a wider fiscal third-quarter
loss, disappointing revenue and said it was implementing a broad cost-savings program. The company said it has engaged
Goldman Sachs to help explore ways to enhance shareholder value.
Keurig Green Mountain climbed 9.6% after Coca-Cola disclosed late Monday that it has bought another 2.8 million
shares of the company within the past week, and reached a deal with Credit Suisse to buy up to 6.5 million more shares
within the next nine months. Dow component Coca-Cola advanced 0.8%.
Write to Tomi Kilgore at firstname.lastname@example.org
(END) Dow Jones Newswires
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