Monday, September 22, 2014
Inquirer Daily News

S&P edges over 1,900, but doesn't hold

NEW YORK - The Standard & Poor's 500 index is flirting with a new milestone: 1,900.

The index briefly climbed above that level Tuesday before dropping back to close just below it. Still, it set an all-time closing high by a fraction of point.

Stocks have gained as most investors remain optimistic that the economy will start to accelerate this year following a cold winter that stymied growth.

The Standard & Poor's 500 index rose 0.80 points, or less than 0.04 percent, to 1,897.45, after climbing as high as 1,902. The Dow Jones industrial average rose 19.97 points, or 0.12 percent, to 16,715.44. The Nasdaq composite was the laggard of the three. The technology-focused index fell 13.69 points, or 0.33 percent, to 4,130.17.

Keurig Green Mountain was the biggest gainer in the S&P 500 index. Its stock surged $8.36, or 7.6 percent, to $119.07 after Coca-Cola raised its stake in the coffee company. Coca-Cola now has a 16 percent stake in Keurig.

Investors were also assessing corporate earnings.

McKesson jumped $5.77, or 3.3 percent, to $180 after the prescription drug distributor said Monday its net income rose 43 percent in its fiscal fourth quarter. Its overall earnings got a boost from stronger results in North America and lower costs.

Beauty products company Elizabeth Arden plunged $8.13, or 23 percent, to $27.50 after it reported an unexpected quarterly loss and disclosed it has hired Goldman Sachs to help it explore strategic alternatives.

Overall, though, first-quarter earnings have come in better than analysts expected.

Nearly all companies in the S&P 500 have reported results, and earnings are forecast to grow by 3.3 percent when final figures are calculated, according to S&P Capital IQ data. Three weeks ago, analysts were expecting earnings to fall 1.1 percent.

Another encouraging sign was that company revenue growth accelerated in the quarter to 3.2 percent, from 1.6 percent in the fourth quarter.

In government bond trading, prices rose. The yield on the 10-year Treasury note dropped to 2.61 percent from 2.66 percent late Monday.

The 1,900 level for the S&P 500 will likely prove a psychological hurdle for investors, as they reassess the market and the economy, said Sean McCarthy, regional chief investment officer for Wells Fargo private bank. More good news on the economy should push stocks higher.

"The pause we are seeing today, is really just that, a pause, with the market coming to grips with where we are," McCarthy said.

Steve Rothwell Associated Press
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