December 19, 2014
Wall Street little changed, Nasdaq, S&P score quarter gains
The S&P 500 and the Nasdaq Composite indexes wrapped up a sixth straight quarter of gains today, a streak not seen in more than 14 years.
The three major US stock indexes, however, closed little changed for the day, following a set of mixed economic data.
After the S&P 500's 30 percent gain last year, many investors had expected a halt to an equity bull market that is now in its fifth year.
But the Nasdaq has now recorded its longest streak of quarterly gains since 2000. For the S&P 500, this is the best run of quarterly gains since 1998. The Dow also marked its fifth positive quarter of the last six.
"We are overextended in the short term, and I do see a bit of a near-term correction, but the dips are seen as opportunities to put cash to work," said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research in Austin, Texas.
"I think the third quarter of the year will be very much like what we just experienced, which is not that much of a move, and I see volatility picking up from the last quarter of the year."
The S&P 500 set 22 record closing highs so far this year, which has increased concerns among some investors that the market might be due for a technical pullback. Yet the CBOE Volatility Index, Wall Street's fear gauge, has held near multi-year lows. The VIX ended on Monday at 11.57, up 2.8 percent.
A recent Reuters poll showed market participants expect the benchmark S&P 500 to hit 2,000 for the first time before the year ends. That milestone would mark a gain of about 8.2 percent from 2013.
The Dow Jones industrial average fell 25.24 points or 0.15 percent, to 16,826.60. The S&P 500 dipped 0.73 of a point, or 0.04 percent, to 1,960.23. The Nasdaq Composite added 10.25 points or 0.23 percent, to 4,408.18.
For the second quarter, the Dow gained 2.2 percent, the S&P 500 rose 4.7 percent and the Nasdaq shot up 5 percent.
For the first half of the year, the Dow rose 1.5 percent while the S&P 500 jumped 6.1 percent and the Nasdaq climbed 5.5 percent.
European equities steadied, as gains in chemicals companies led by the Belgian group Solvay were offset by weaker travel stocks after a ratings downgrade caused easyJet shares to slump.
Portugal's Banco Espirito Santo also slumped 16.5 percent, extending an 11.4 percent fall on Friday. Luxembourg's justice authorities began an investigation into three holding companies of the Espirito Santo banking family over alleged breaches of company law.
European chemicals shares rose 0.6 percent, boosted by Solvay. Analysts at Exane, the top-ranked broker on the stock according to StarMine, upgraded its rating to "outperform" from "neutral". Solvay shares rose 3.6 percent.
The broader market was also supported by Dutch conglomerate Philips, which rose 4.1 percent after saying it would merge its Lumileds LED components and automotive lighting divisions into a standalone subsidiary that could be spun off.
But the gains were eclipsed by a 0.6 percent fall in the European travel and leisure index, as easyJet slumped 6.4 percent. The drop came after a rating cut by Bank of America Merrill Lynch to "underperform" from "neutral".
The FTSEurofirst 300 index of top European shares ended 0.05 percent lower at 1,370.60 points after moving in and out of positive territory during the day. It still recorded a fourth straight quarter of gains, and analysts said the market's longer-term outlook remained positive.
Meanwhile, Japanese shares rebounded today after a sharp sell-off in the previous session, supported by fund managers' quarter-end window-dressing as well as Wall Street's advance, posting modest gains on the month and the quarter.
The benchmark Nikkei, which lost 1.4 percent on Friday to suffer its biggest daily slide in six weeks, added 0.4 percent to 15,162.10.
The index rose 2.3 percent for the April-June quarter and 3.6 percent for the month of June, which was its biggest monthly gain in six months. However, the Nikkei was still down 6.9 percent since the start of this year.
The broader Topix climbed 0.8 percent to 1,262.56 in moderate trade, while the new JPX-Nikkei Index 400 gained 0.7 percent to 11,466.23.
On the Tokyo Stock Exchange's main board, 86 percent of shares rose while only nine percent of shares fell, an unusually uneven balance when the overall gain in the Topix is less than one percent. Market players said this pointed to window-dressing.