By Dow Jones Business News,
June 10, 2014, 03:57:00 PM EDT
By Tomi Kilgore
U.S. stocks inched lower Tuesday, as investors paused to assess the market's recent streak of record closes.
The Dow Jones Industrial Average eased four points, or less than 0.1%, to 16939. Within the Dow, International
Business Machines and United Technologies led the decliners, while Intel paced the gainers.
The S&P 500 index slipped one point, or 0.1%, to 1950, while the Nasdaq Composite Index ticked down one point, or
less than 0.1%, to 4335.
On Monday, the Dow posted a fourth straight gain and third straight record close. The S&P 500 closed at a fourth
straight record Monday, and 19th record this year, while the Nasdaq closed at a three-month high.
A slowly but steadily improving economy, accommodative central-bank policies and low interest rates are providing a
positive backdrop for stocks, money managers say. But with benchmark indexes near record highs, and little news to
provide a trading spark, activity remained muted Tuesday, traders said, with overall volume on pace to fall short of the
year-to-date daily average of 6.45 billion shares for a 17th-straight session.
Bruce Bittles, chief investment strategist at Robert W. Baird, which oversees $105 billion in client assets, said
since volatility has stayed low for so long, investors may be getting too comfortable with the market's steadily-rising
trend. The Chicago Board Options Exchange's Volatility Index, known as the market's "fear gauge," ticked up 0.2% to
11.17, after closing at a seven-year low on Friday. "Optimism is OK, until it hits an extreme. And it's getting pretty
close to that, in my opinion," Mr. Bittles said.
Karyn Cavanaugh, market strategist at Voya Investment Management, which manages about $200 billion, said the market
could remain in limbo, at least until data on retail sales are released later in the week.
The lack of volatility "does get a little concerning" but given the steadily improving fundamental environment, "
the market is doing what it's supposed to do," Ms. Cavanaugh said. "Right now, there is nothing going on that looks like
it will stop the market from grinding higher."
On the economic front, wholesale inventories for April increased slightly more than expected, while data showed
that optimism among small-business owners improved.
The yield on the 10-year Treasury note inched up to settle at a near one-month high of 2.637%.
Crude-oil futures declined 0.1% to settle at $104.35 a barrel, after hitting a three-month high on Monday, while
gold futures added 0.5% to $1,259.80 an ounce. The dollar gained against the euro, but slipped against the yen.
European markets rose, with the Stoxx Europe 600 closing up 0.3% to post a fifth-straight gain and the highest
close since January 2008.
China's Shanghai Composite advanced 1.1% following news that China's central bank will reduce bank reserve
requirements for city commercial banks and rural banks. Japan's Nikkei Stock Average fell 0.9%.
In corporate news, RadioShack slumped 11% after the consumer-electronics retailer reported a wider-than-expected
fiscal first-quarter loss and revenue that fell short of forecasts, citing weakness in its mobile-phone business.
Valeant Pharmaceuticals declined 1% after Allergan rejected the takeover offer from Valeant and Pershing Square
Capital Management to buy the company, which said the latest offer substantially undervalues the Botox maker. Allergan
General Motors eased 0.2% after the auto maker's chief executive, Mary Barra, said the company wouldn't be able to
provide an estimate of the financial fallout of the ignition-switch recall until early next month. Analysts have
estimated the costs, to compensate victims, for legal fees and any settlements or judgments, could range from less than
$5 billion to as much as $7 billion.
Achillion Pharmaceuticals surged 62% on heavy volume after the U.S. Food and Drug Administration removed the hold
it placed on the company's experimental hepatitis C treatment, sovaprevir. That allows the company to proceed with
Write to Tomi Kilgore at firstname.lastname@example.org
(END) Dow Jones Newswires
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