S&P 500 halts rally, Dow advances as investors consider equity values - The Buffalo News

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S&P 500 halts rally, Dow advances as investors consider equity values

The Standard & Poor’s 500 Index slipped, halting a four-day streak of record closes, as investors weighed equity valuations. The Dow Jones industrial average closed at an all-time high.

eBay Inc. dropped 2.7 percent after saying David Marcus will step down as the head of its PayPal unit to join Facebook Inc. Facebook rallied 4.6 percent to the highest since March. RadioShack Corp. plunged 10 percent after reporting a wider quarterly loss. Molson Coors Brewing Co. jumped 5.4 percent for the biggest gain in the equities benchmark. Electronic Arts Inc. added 2.3 percent after disclosing release dates for new games.

The S&P 500 fell less than one point to 1,950.79, trimming an earlier decline of 0.3 percent. The Dow average added 2.82 points, or less than 0.1 percent, to 16,945.92, to extend a record. About 5.2 billion shares changed hands on U.S. exchanges, 17 percent below the three-month average.

“It shouldn’t be a shock to anyone that we’re seeing softness after a blistering recovery,” said Chad Morganlander, a fund manager at Stifel Nicolaus & Co., which oversees $160 billion, from Florham Park, N.J. “This is a temporary reprieve from a market that’s being seeing highs.”

The S&P 500 has advanced 7.4 percent since a low April 11 as data showed the U.S. economy is recovering from the impact of extreme weather earlier this year. The gauge rallied last week after the European Central Bank announced a stimulus package, and American jobs data topped estimates.

The equities benchmark trades at 16.5 times the projected earnings of its members, up from a multiple of 14.8 times at the beginning of February. The gauge’s 14-day relative strength index was 73.7 Monday, above the 70 reading that some investors see as a signal to sell.

The S&P 500 has risen for nearly 32 months without a decline of 10 percent or more, versus the average of 18 months since 1945, according to data from S&P Capital IQ strategist Sam Stovall. In 2011, the S&P 500 index dipped as much as 19 percent from late April through early October, the closest the market’s come to ending the bull market that began in 2009.

eBay dropped 2.7 percent to $48.25. Marcus, 41, is leaving PayPal on June 27, according to a statement from eBay. He will lead Facebook Inc.’s mobile-messaging business, a spokeswoman at the social-network operator said. Facebook added 4.6 percent to $65.77, the highest since March 21.

Allergan Inc. slid 0.7 percent to $163.09 after the Botox maker’s board unanimously rejected a takeover offer from Valeant Pharmaceuticals International Inc.

The board said the unsolicited proposal, with the backing of Pershing Square Capital Management LP, undervalues the company. Valeant shares dropped 0.9 percent for a sixth day of losses, the longest streak in two years.

RadioShack slid 11 percent to $1.38. The struggling electronics retailer reported a loss of $98.3 million last quarter and said sales slid for the ninth straight time.

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