Broadgate: Market News 11/6
11 June 2013
Stocks ended little changed in weak volume on Monday, pausing after the previous session’s strong gains and getting only a brief boost when the United States’ credit outlook was revised to stable from negative.
Shares of Apple declined 0.7 percent to $438.89, reversing early gains to become the biggest drag on both the S&P 500 andNasdaq composite indexes. The company kicked off its annual conference in San Francisco for its developers.
Homebuilders were among the top decliners, led by losses in Lennar Corp, off 3.3 percent at $37.31 after JP Morgan downgraded the company’s stock to “neutral” from “overweight”. D.R. Horton Inc shares fell 2.1 percent to $23.06.
Analysts said the market was still cautious about when or if the Federal Reserve might reduce its stimulus efforts. The market ended last week with sharp gains, and the Dow posted its best daily percentage increase since January 2 after the U.S. jobs report on Friday eased some of the Fed worries.
“It seemed to at least stem the corrective phase markets were in the beginning and middle of last week,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, which manages about $58 billion in assets.
The reaction to rating agency Standard & Poor’s revision of the U.S. sovereign credit outlook to stable from negative gave stocks only a short-lived lift. The action put the likelihood of a near-term downgrade of the rating at “less than one in three.
The Dow Jones industrial average was down 9.53 points, or 0.06 percent, at 15,238.59. The Standard & Poor’s 500 Index slipped 0.57 point, or 0.03 percent, at 1,642.81. The Nasdaq Composite Index was up 4.55 points, or 0.13 percent, at 3,473.77.
The agency had downgraded the United States to “AA+” from the top-rated “AAA” in the summer of 2011.
While last week’s employment report eased jitters that the Fed could cool the pace of its bond buying in the very near term, some investors still are preparing for the Fed to reduce its quantitative easing by the end of the year.
Others expect the market’s uptrend to continue for the near term. The S&P 500 is up 16.3 percent for the year so far.
“I think it’s going to be choppier … but most of what I’m reading suggests we’re going to see the market surpass the May highs,” said Greg Sarian, managing director and partner at HighTower’s The Sarian Group. “I think you have to take advantage of dips.”
On the Dow, McDonald’s Corp was among the biggest gainers after it said sales at its established restaurants around the world rose in May, sending its shares up 1.3 percent at $99.53.
Facebook Inc shares rose 4.5 percent to $24.33 after Stifel Nicolaus raised its rating on the social networking company’s stock.
Volume was roughly 5.5 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, below the average daily closing volume of about 6.4 billion this year.
Decliners outpaced advancers on the NYSE by about 1.3 to 1 while advancers outpaced decliners on the Nasdaq by a ratio of about 1.8 to 1.
After the bell, U.S. shares of Lululemon Athletica Inc fell 13.8 percent to $70.90 after it announced its chief executive will step down. The announcement comes three months after the yogawear retailer’s recall of see-through pants.
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