NEW YORK, Feb 12 — US stocks fell modestly yesterday as investors found few reasons to keep pushing shares higher following a six-weeks-long advance that has taken the S&P 500 index near record highs.
The benchmark index is up more than 6 per cent so far this year after a steep rally in January that has stalled as the S&P and Dow industrials near multi-year highs.
“This is still a market that looks terrific, but when you’re up for six weeks in a row, everyone is going to want to take a pause going into the seventh week even if there is no bad news out there,” said Eric Kuby, chief investment officer at North Star Investment Management in Chicago.
The S&P 500 would need to rise 3.9 per cent to reach its all-time intraday high of 1,576.09, which was hit in October 2007.
Google Inc shares fell 1 per cent at US$777.67 after the company said in a filing former chief executive Eric Schmidt is selling roughly 42 per cent of his stake in the Internet search giant, a move that could potentially net him US$2.51 billion.
But the decline was offset by gains in Apple, up 1.4 per cent at US$481.73 after a New York Times report that the iPhone maker is experimenting with the design of a device similar to a wristwatch.
The Federal Reserve’s Vice Chair Janet Yellen, seen as a potential successor to Fed Chairman Ben Bernanke next year, said the Fed is still aggressively stimulating an anaemic US economic recovery that has failed to bring rapid progress on employment.
The Dow Jones industrial average was down 31.05 points, or 0.22 per cent, at 13,961.92. The Standard & Poor’s 500 Index was down 1.80 points, or 0.12 per cent, at 1,516.13. The Nasdaq Composite Index was down 5.25 points, or 0.16 per cent, at 3,188.62.
Upbeat US and Chinese data last week helped the S&P 500 extend its weekly winning streak to six. The index gained about 8 per cent over that period.
Equities have been strong performers lately, rising 6.3 per cent so far this year. Many investors have used any declines in the market as opportunities to buy.
“Everyone wants to buy on a dip in this market, but if you’re on the sidelines right now, the decline we’re seeing today just isn’t the kind you would jump in on,” Kuby said.
President Barack Obama will describe his plan for spurring the economy in his State of the Union address today. He is expected to offer proposals for investment in infrastructure, manufacturing, clean energy and education.
Opposition has grown to the US$24.4 billion buyout of Dell Inc , the No. 3 personal computer maker, as three of the largest investors joined Southeastern Asset Management on Friday in raising objections. Dell said in a regulatory filing it had considered many strategic options before opting to go private in a buyout led by Chief Executive Michael Dell.
Dell shares hovered near US$13.65, the buyout offer price.
Regeneron Pharmaceuticals Inc shares rose 1.6 per cent at US$168.72 after it said longtime drug development partner Sanofi plans to boost its stake.
Moody’s Corp was one of the strongest percentage gainers on the S&P 500, rising 3.9 per cent to US$45.06. Last week the stock plunged 22 per cent after the US government launched a civil lawsuit against the company. The sell-off marked the stock’s worst week since October 2008. — Reuters