US stocks retreated from near four-year peaks yesterday, while a batch of large-cap shares hit new highs, with the help of portfolio managers snapping up top performers near the end of the quarter.
With the first quarter ending on Friday, portfolio managers adjusted holdings by buying some of the best performers to dress up their portfolios. A total of 175 stocks on the New York Stock Exchange hit new 52-week highs yesterday, including Dow components Home Depot and International Business Machines, along with high-end retailers.
“As long as the economy continues to improve, the market will continue to go up,” said Bryant Evans, investment advisor and portfolio manager at Cozad Asset Management, in Illinois.
The moves follow three months of big gains, putting the S&P 500 on track for its best quarter since the third quarter of 2009. It follows a similarly strong run in the fourth quarter of 2011, with gains for the past six months totaling 25 percent.
On Monday, the three major US stock indexes rallied more than one per cent after Federal Reserve chairman Ben Bernanke signaled that supportive monetary policy will remain in place.
Yesterday Bernanke said in an ABC News interview, when asked about the potential for more quantitative easing, that the Fed isn’t taking any options off the table.
The Dow Jones industrial average shed 43.90 points, or 0.33 per cent, to 13,197.73 at Tuesday’s close. The Standard & Poor's 500 Index dropped 3.99 points, or 0.28 per cent, to 1,412.52. The Nasdaq Composite Index dipped 2.22 points, or 0.07 per cent, to 3,120.35.
Apple hit another all-time high of $616.28, and closed with a market capitalisation to $572.92bn. The iPad and iPhone maker’s stock then pulled back from that peak to end at $614.48, still up 1.2 per cent for the day.
Among Dow components hitting 52-week highs, IBM climbed to $208.56 and then retreated slightly from that peak to end down 0.3 per cent at $207.18.
Walt Disney climbed to a 52-week high of $44.50, only to slip to $44.15, off 0.5 per cent. Home Depot reached a 52-week high at $50.34, then gave up some of that gain to end at $50.04, off 0.2 per cent for the day.
Among sectors, the S&P technology and financial indexes led quarterly gains, with technology last up 22.1 per cent and financials up 22 per cent for the quarter so far.
Among top performing-stocks, Bank of America, the second-best performing S&P 500 stock for the quarter, is up 75 per cent; Netflix, the third best, is up 74.6 per cent. Apple, in the 10th-best spot, is up 51.9 per cent for the first quarter so far.
Some investors believe further gains will be difficult to achieve since the rally has lasted for months without a major correction.