US stocks on Tuesday pulled back from intraday all-time highs but were still trading above their record closing highs, as a rise in oil prices and stronger-than-expected earnings from Alcoa Inc. bolstered sentiment.
Advertisement
The biotech stock short sellers are fleeing from. “It feels like institutional investors have been dragged, kicking and screaming, off of the sidelines”. Please see our terms of service for more information.
“But the question is whether or not stock prices can keep up this pace”.
Declining earnings, stagnant overseas economic growth, a plunge in oil prices, negative interest rates in some countries, the threat of interest rate increases from the U.S. Federal Reserve and a recent spate of panic selling following Britain’s vote to withdraw from the European Union have all undermined the bull market in the past year.
In Japan, the Nikkei Stock Average 225 surged 2.89%, Australia’s ASX All Ordinaries Index gained 0.84%, while South Korea Kospi Index was down 0.10%.
The S&P 500 ended at a record high of 2,137.16 after touching a record intra-day high of 2,143.16.
Although Stockton doesn’t provide a precise time frame for the S&P 500 to hit those lofty levels, she said “year-end would be a good possibility”.
The latest ascent occurred against a backdrop of investor aversion. Utility and phone companies are up the most this year, posting advances of at least 20 percent, with utilities reaching a record last week.
Caution prevails not only among investors, but also within businesses and governments.
Gold for August delivery out of NY settled slightly lower at US$1356 an ounce. “The rally is likely to prove unsustainable and short-lived”, said Daisuke Uno, chief strategist at Sumitomo Mitsui Bank. “All three actors are very pessimistic seven years into this expansion”. With earnings trending flat to lower for the past year and a half, it’s no coincidence that the market struggled for much of that period. A decline of that size is the common threshold for defining a bear market.
On the data front, a June reading on small-business optimism rose for a third straight month (http://www.marketwatch.com/story/small-business-optimism-rises-for-third-straight-monthly-gain-2016-07-12), but remained soft compared with its long-term average.
Investors will also watch out for comments from company executives, especially those of big banks later this week, on the impact of Britain’s vote to leave the European Union. And despite frothy stock valuations (http://www.marketwatch.com/story/with-greater-highs- for-stocks-come-greater-risks-2016-07-11), “stocks actually look cheap relative to bonds”, he said, as bond yields have tumbled to record lows and bond prices have spiked.
Advertisement
The S&P 500 posted 76 new 52-week highs and no new lows; the Nasdaq Composite recorded 153 new highs and 11 new lows. In a stretch ending in 1985, the S&P 500 went 323 days without setting a record.
