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Wall Street: Stocks slip from record levels

U.S. stocks fell in early trading Tuesday, paring a seventh straight December gain for the Standard & Poor’s 500 Index, after the gauge closed at a record for the 53rd time in 2014.

The S&P 500 dropped 0.36 percent, or 7.48, to 2,083.09 at 10:10 a.m. in New York. The Dow Jones Industrial Average lost 56.35 points, or 0.31 percent, to 17,981.88.

The S&P 500 has climbed 0.9 percent in December as the world’s largest economy expanded at the fastest pace in more than a decade and the Federal Reserve pledged to be patient on the timing of interest-rate increases. A report today will show consumer confidence increased in December, economists forecast.

“The U.S. economy is doing well,” Herbert Perus, who helps oversee $36 billion as head of equities at Raiffeisen Capital Management in Vienna, said in an interview. “Some stocks seem overpriced, but if you look deeper into the market you find a lot of good managed companies with good products that are still not expensive.”

The S&P 500 and Russell 2000 Index closed at all-time highs Monday, while the Dow was near a record after climbing above 18,000 last week for the first time. The Nasdaq Composite Index finished at the highest level since March 2000.

December’s advance has extended the S&P 500’s rally for the year to 13 percent while the Dow has increased 8.6 percent. The Russell 2000 has advanced 4.4 for the year.

The gains for U.S. equities come amid a slump for the rest of the world. While the S&P 500 is heading for a third straight annual advance, the MSCI All-Country World Index excluding the U.S. is down 0.6 percent for the year.

The S&P 500 is trading at 17.5 times estimated profit, according to data compiled by Bloomberg. That’s about 9 percent above the multiple for the MSCI All-Country World Index.

After a selloff in oil prices pushed the S&P 500 to its lowest level in seven weeks on Dec. 16, the index resumed its rally in the latest of recoveries from upheavals that threatened to derail a bull market in its sixth year. The S&P 500’s worst retreat was only 7.4 percent, and the gauge recovered from each of its declines of 4 percent or more within one month.

The S&P 500 hasn’t had a four-day drop in a year. The benchmark gauge has declined for four consecutive trading sessions at least once every year since at least 2000. It also hasn’t had a decline of 10 percent or more over any period since October 2011.

Volume on U.S. exchanges has been lower in recent days. It was 32 percent below the three-month average yesterday and reached the lowest level of the year for a full day of trading on Dec. 26.

For more business stories, go to the Buffalo News business section.