S&P 500 flirts with 1,900, but falls short
By STEVE ROTHWELL
the associated press | May 14,2014
Trader Christopher Morie, right, works on the floor of the New York Stock Exchange, Tuesday.
NEW YORK — The Standard & Poor’s 500 index is flirting with a new milestone: 1,900.
The index briefly climbed above that level on 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.
First-quarter corporate earnings came in better than expected, giving stocks a lift.
Whether the S&P 500 climbs beyond the 1,900 level or falls back now depends on the how the economy develops, said John Canally, chief market strategist for LPL Financial. If growth falters, stocks will likely slide, he said.
“But if the economy can deliver ... and the global economy can accelerate, we’ll look back at 1,900 and say ‘Yes that was just a stop on the way to 2,000,’”ww he said.
On Tuesday, the Standard & Poor’s 500 index rose 0.8 points, or less than 0.1 percent, to 1,897.45, after climbing as high as 1,902 in early trading.
The Dow Jones industrial average rose 19.97 points, or 0.1 percent, to 16,715.44.
The Nasdaq composite was the laggard of the three. The technology-focused index fell 13.7 points, or 0.3 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, the world’s biggest beverage company, disclosed in a regulatory filing that a subsidiary 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.
Despite the positive backdrop, the stock market’s move higher this year has been more of a grind compared with last year’s surge.
Along with worries about the U.S., there are concerns about growth overseas, as well as tensions with Russia after that country annexed the Crimea region in Ukraine.
Another factor is that stocks, having rallied for more than five years, are also no longer the bargain they once were.