tocks edged up yesterday, with the benchmark S&P 500 closing at a two-year high, a trend investors expect to continue through the rest of the year.
“A lot of traders thought the market would have a little bigger bump” after breaking a key technical level of 1,228 on the S&P, said Alan Valdes, director of floor trading for DME Securities in New York.
“What we have seen today is trading in a small band. They take it up to 1,228 (but) they are not really going through it big time and we are seeing some profit-taking going on.”
Investors loaded up on bank stocks, which have risen 12.4 per cent for the month. Late in the year, winning positions often attract buyers seeking to improve fund performance in a practice known as window dressing. The KBW Bank Index gained 2.2 per cent, boosted by a 5.4 per cent rise in Bank of America to $12.65.
The Nasdaq finished higher for the seventh straight day and closed at its highest level since December 2007, paced by a 6.8 per cent jump in Teva Pharmaceutical Industries to $52.63 after the drugmaker said it expects its experimental multiple sclerosis pill will win US approval within two years after a clinical trial met its main goal.
Expectations of reduced volatility suggest a steady climb through the rest of the year. The CBOE Volatility Index VIX, a barometer of Wall Street anxiety, fell more than 2 per cent to 17.25.
The VIX closed under 18 for three straight days, and MKM derivatives strategist Jim Strugger said it is considered to be the start of a sustained period below its long-term average of just above 20.
The Dow Jones industrial average dipped 2.42 points, or 0.02 per cent, to 11,370.06. The Standard & Poor’s 500 Index gained 4.72 points, or 0.38 per cent, to 1,233.00. The Nasdaq Composite Index rose 7.51 points, or 0.29 per cent, to 2,616.67.40
The Dow was pressured by major manufacturer DuPont after it gave its outlook for 2011. DuPont slipped 1.1 per cent to $48.32.
A tentative agreement with congressional Republicans to extend tax breaks announced by President Barack Obama hit opposition from prominent Democrats. Wall Street wants the tax breaks to boost returns and spur growth.