The Herald Bulletin

Afternoon Update

Breaking News

November 18, 2013

Stocks hit round-number milestones, then slip

NEW YORK — The stock market broke through two milestones Monday before giving up nearly all its gains late in the day.

Stocks rose from the opening bell, lifting the Dow Jones industrial average above 16,000 for the first time and the Standard & Poor's 500 index past 1,800, two big markers in a historic bull market. But by the end of day, both indexes had fallen below those levels.

"The market is always a little hesitant when it gets to round numbers," says Ed Cowart, managing director at Eagle Asset Management. "You don't want to be the first guy buying at 16,000 on the Dow."

The Dow managed to eke out a gain over Friday's close with a late push higher, ending just 24 points shy of 16,000. Both the Dow and the S&P 500 are on track for their best year in a decade and have soared more than 140 percent since bottoming out in the Great Recession more than four years ago.

Investors have pushed stocks up sharply this year as the U.S. economy improves, companies report record profits and the Federal Reserve keeps up its easy-money policies.

"The Fed is still pumping money into the system, which is helping fuel the market," says Frank Fantozzi, CEO of Planned Financial Services, a wealth manager. "There's much more confidence in the market."

The Dow has risen for six weeks straight and is up 22 percent so far this year. The market hasn't risen that much in a whole year since 2003.

The Dow has closed above round-number milestones two times this year: 14,000 in early February and 15,000 in early October. The quick climb has led some experts to wonder whether stocks are too high and set to tumble.

Brad McMillan, chief investment officer for Commonwealth Financial, says he's not worried yet, but notes three ingredients of market froth are already present: investors borrowing record amounts to buy stock, more companies going public for the first time and Main Street investors putting money into the market after years of pulling out.

"Greed is taking over from fear," McMillan says.

It's not clear whether stocks have become expensive yet or are just fairly priced. One measure of value, the ratio of stock prices to forecast earnings, is at 15 for S&P 500 companies. That is slightly below the 15-year average of 16.2, according to FactSet, a data provider.

Including this year's gains, the S&P 500 is up 165 percent from the start of the current bull market in March 2009, 56 months ago.

Bull markets dating back to the Great Depression have averaged 57 months, according to S&P Capital IQ, a research firm, however the duration of bull markets has varied greatly over time. The bull market of the 1990s lasted 113 months, for instance.

Investors have been betting that Fed stimulus policies are not likely to change soon. Janet Yellen, the nominee to succeed Ben Bernanke as Fed chairman, indicated in congressional testimony last week that she was prepared to keep interest rates low to help the economy.

Investors were also encouraged by a Chinese government announcement late Friday that it plans to open state industries to greater competition and allow more foreign investment. Many big U.S. companies have come to rely on emerging markets like China to boost revenue. About half of the revenue in the S&P 500 comes outside the U.S.

The S&P 500 closed down 6.65 points, or 0.4 percent, at 1,791.53. The Dow rose 14.32 points, or 0.09 percent, to 15,976.02.

The Nasdaq composite fell 36.90 points, or 0.9 percent, to 3,949.07.

Among stocks making big moves, Boeing rose $2.28, or 1.7 percent, to $138.36, the biggest gain in the Dow. The plane maker booked $100 billion in orders at the opening of the Dubai Airshow.

Tyson Foods jumped 65 cents, or 2.3 percent, to $29.42. The food company said its net income surged 41 percent in the latest quarter on higher sales of beef and chicken. The company raised its dividend 50 percent.

The yield on the 10-year Treasury note fell to 2.67 percent from 2.71 percent.

 

1
Text Only
Breaking News
  • news_fergusonprotests.jpg Streets of Ferguson stay calm after violent nights

    Ferguson's streets were peaceful for a third night as tensions between police and protesters continued to subside after nights of violence and unrest erupted when a white police officer fatally shot an unarmed black 18-year-old.

    August 23, 2014 1 Photo

  • news_icelandvolcano.jpg Subglacial volcanic eruption begins in Iceland

    Iceland raised its aviation alert to red Saturday as a subglacial eruption began at the restless Bardarbunga volcano, which has been rattled by thousands of earthquakes in the past week, the country's Meteorological Office said.

    August 23, 2014 1 Photo

  • news_obamavacation.jpg Obama taking less vacation, but too much for some

    President Barack Obama has spent less time away from the White House than his predecessors. But his two-week break on the resort island of Martha’s Vineyard and hours on the golf course have his detractors teeing up as they highlight the slew of foreign policy crises currently facing the United States.

    August 23, 2014 1 Photo

  • people_chapman.jpg Parole denied again for John Lennon’s killer

    John Lennon’s killer was denied release from prison in his eighth appearance before a parole board, correction officials said Friday.

    August 23, 2014 1 Photo

  • news_holtzclaw.jpg Policeman accused of serial sex assault on patrol

    An Oklahoma City police officer arrested on charges of serial sexual assault preyed on women in the rundown neighborhoods he was assigned to patrol — picking some up off the street, pulling others over at traffic stops and in one case taking a woman to a nearby school, according to an affidavit released Friday.

    August 22, 2014 1 Photo

  • news_ferguson.jpg New fear: What happens in Ferguson if no charges?

    Conditions calmed this week in Ferguson after nights of sometimes violent unrest stemming from the fatal shooting of a black 18-year-old by a white police officer. But a delicate and crucial question lingers: What happens if the grand jury now considering the case doesn’t return a charge against the officer?

    August 22, 2014 1 Photo

  • Toyota to boost SUV production at Indiana factory Toyota says it will spend $100 million to boost production of the Highlander SUV at its southwestern Indiana factory, with plans to add 300 workers in the next couple of years.

    August 22, 2014

  • 18 people rescued from flooded Indiana homes Northwestern Indiana police say firefighters used boats to rescue 18 people after flood waters from heavy overnight rains surrounded their homes.

    August 22, 2014

  • NWS -  HB0823 - Fire-Rozelle Johnson - JC 28a.jpg Lightning might have caused Anderson funeral home fire

    A lightning strike is suspected of starting a fire at Rozelle-Johnson Funeral Services, Ind. 32 and Rangeline Road, early Friday morning.

    August 22, 2014 3 Photos

  • Teams test out a new helmet, but does it work?

    Arkansas coach Bret Bielema proudly posted a message on Twitter last spring that featured the Razorbacks' new helmets — a futuristic design by Riddell called the SpeedFlex that is supposed to be the latest in head protection.

    August 22, 2014

Featured Ads
More Resources from The Herald Bulletin
AP Video
Furry Roommates: Dorms Allowing Cats and Dogs Chase Rice Defends Bro-Country 'Jersey Shore Massacre' Pokes Fun at MTV Series Raw: Wash. Mudslides Close Roads, Trap Motorists DC's Godfather of Go-Go Honored Ukraine Calls Russian Convoy a 'direct Invasion' Girl Meets Her 'one in the World' Match Coal Gas Boom in China Holds Climate Risks Japan Landslide Rescuers Struggle in Heavy Rain Raw: Severe Floods, Fire Wrecks Indiana Homes Endangered Red Wolves Face Uncertain Future Raw: Russian Aid Convoy Arrives in Ukraine Okla. Policeman Accused of Sex Assaults on Duty Dominican Republic Bans Miley Cyrus Concert Raw: Israeli Air Strike in Gaza Raw: Bodies of MH17 Victims Arrive in Malaysia Attorney: Utah Eatery Had Other Chemical Burn
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Helium debate
Helium
Front page
Poll

Do you think heroin is a significant problem in Madison County?

Yes, it has surpassed meth as the problem drug
Yes, but meth is still a bigger problem
No, this was an isolated case
Not sure
     View Results