ENERGY and commodity shares lifted Wall Street to modest gains yesterday, but the lowest volume so far this year indicated the equity rally may be near a top.
The Dow Jones industrial average dipped 5.07 points, or 0.04 per cent, to 12,268.19. The Standard & Poor’s 500 Index rose 3.17 points, or 0.24 per cent, to 1,332.32. The Nasdaq Composite Index gained 7.74 points, or 0.28 per cent, to 2,817.18.
The S&P 500 rose to trade near its highest since June 2008, though the index was stuck in the 1,325 to 1,333 area without enough buyers to get through this technical hurdle.
A mere 6.6bn shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the lowest volume so far this year and far below the 8bn daily average for 2011.
Shawn Hackett, president at Hackett Advisors, said rising index levels on falling volume sets the stage for a pullback.
“Everything I see suggests the driver now is a last bit of greed and momentum before the market runs out of buyers,” he said.
Three-month copper hit a record high after Chinese import figures suggested strong demand for basic materials. Freeport McMoRan Copper & Gold jumped 4.9 per cent to $56.14 and the PHLX Gold/Silver index rose 2.2 per cent.
Wal-Mart Stores was one of the worst performers on the Dow after JPMorgan downgraded the stock. Shares fell 1.6 per cent to $54.80.
The S&P 500 has gained nearly 27 per cent since the start of September. It now stands near the 50 per cent extension of last year’s slide from April to July and also near 100 per cent advance from the low hit in March 2009.
Advancing stocks outnumbered declining ones on the NYSE by a ratio of about five to four, while on the Nasdaq, about seven stocks rose for every six that fell.
Obama’s budget, announced yesterday, would provide $8bn for investment in clean energy, but big drugmakers might take a hit from generic competition under two proposals in the plan.
Among alternative energy companies, Trina Solar gained 5.2 per cent to $28.79 while GT Solar International climbed 2.7 per cent to $11.50. Drugmaker Merck & Co, a Dow component, slid 0.8 per cent to $32.82.
Green Mountain Coffee Roasters shares jumped 6.7 per cent to $46.35 after reports that the company has been in partnership negotiations with Starbucks.