U.S. Stocks Fluctuate as Intel Gains, Investors Await Fed
<cite class="byline" style="margin: 0px; padding: 0px; border: 0px; outline: 0px; font-size: 11px; vertical-align: baseline; background-color: transparent; width: 640px; color: rgb(111, 111, 111); display: block; font-style: normal; line-height: 1.3em; position: static !important; background-position: initial initial; background-repeat: initial initial;">By Alex Barinka & Nikolaj Gammeltoft - Aug 19, 2013 11:03 PM GMT+0800</cite>
The S&P 500 rose less than 0.1 percent to 1,656.11 at 11:01 a.m. in New York. The Dow increased 6.9 points, or 0.1 percent, to 15,088.37. Trading in S&P 500 stocks was 19 percent below the 30-day average at this time of day. The S&P 500 declined 2.1 percent last week and the Dow average lost 2.2 percent amid speculation the Fed will pare its bond-purchase program as the economy recovers.
“We are still in that dead zone where there is a void of catalysts –- no Fed, no earnings, summer holidays, etc.,” Jeff Saut, theSt. Petersburg, Florida-based chief investment strategist at Raymond James & Associates, wrote in a note to investors today. He helps oversee about $400 billion “I think rallies are for selling on a trading basis, but remain quite bullish on the longer-term.”
The Federal Open Market Committee will release minutes of its July 30-31 meeting on Aug. 21. Investors and analysts will be looking for clues on when central bankers plan to reduce their $85 billion in monthly asset purchases. Officials will begin to trim buying at their Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg on Aug. 9-13.|
Jackson Hole
Central bankers and policy makers meet in Jackson Hole, Wyoming, from Aug. 22 to Aug. 24 to discuss the global economy and monetary policy.
Fed stimulus helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009. Benchmark indexes reached record highs on Aug. 2. The S&P 500 has dropped 3.1 percent since then, and is trading close to its average price over the past 50 days.
Some 41 S&P 500 stocks had their 14-day relative-strength index below 30 at the end of last week, the most since Nov. 16, Bloomberg data show. RSI measures the degree to which gains and losses outpace each other and some analysts who watch charts to predict market moves consider a reading lower than 30 as indicating the stock has fallen too far too fast.
Emerging Markets
Investors are favoring U.S. stocks over emerging markets by the most ever as fund flows and volatility measures show institutions are increasingly seeking the relative safety of American equities. Almost $95 billion was poured into exchange-traded funds of American shares this year, while developing-nation ETFs saw withdrawals of $8.4 billion, according to data compiled by Bloomberg. The S&P 500 trades at 16 times profit, 70 percent more than the MSCI Emerging Markets Index.
The Chicago Board Options Exchange Volatility Index, or VIX, climbed 1.5 percent today to 14.59. While the gauge has advanced 22 percent since a low on Aug. 5, it remains 20 percent lower for the year. Information technology companies gained 0.8 percent as a group, the biggest rise among 10 industries in the S&P 500. Financial shares had the largest decline, dropping 0.7 percent.
Intel, Apple
Intel gained 3.3 percent, the most in the S&P 500, to $22.64. Piper Jaffray changed its rating on the shares to neutral from underweight and raised its price target to $22 from $20. Apple rose 1.8 percent to $511.42. The shares have gained 13 percent in the last six trading days. Billionaire Carl Icahn said Aug. 13 that he had acquired a large position in the company.
Chesapeake Energy Corp. added 0.7 percent to $25.17 after the company said in a filing Aug. 16 that Icahn, its second-largest investor, boosted his stake to 9.98 percent from 8.97 percent at the end of the second quarter.
Edwards Group soared 18 percent to $9.99 after Atlas Copco, the world’s largest maker of air compressors, agreed to pay $1.2 billion for the British vacuum-pump maker. Shareholders of the Crawley, England-based company will receive as much as $10.50 a share depending on financial results for this year, Atlas Copco said in a statement today.
Dollar General
Dollar General Corp. gained 3.1 percent to $54.07 as JPMorgan Chase & Co. changed its rating on the shares to the equivalent of a buy from hold. The firm increased its target price to $64 from $51. Zillow lost 4.1 percent to $87.45. The operator of the largest real-estate information website agreed to acquire StreetEasy for $50 million in cash to expand its coverage of the New York housing market. Cobalt International Energy Inc. fell 13 percent to $25.47 after the oil exploration company said it found no commercial hydrocarbons in its Ardennes well in the Gulf of Mexico.
To contact the reporters on this story: Alex Barinka in New York at [email protected]; Nikolaj Gammeltoft in New York at [email protected]
To contact the editors responsible for this story: Andrew Rummer at [email protected]; Lynn Thomasson at [email protected]
