By Victor Reklaitis and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks showed little change
Tuesday, catching their breath after the S&P 500 closed at a
record on Friday.
A reading on U.S. factory activity surpassed expectations,
boosting sentiment.
The S&P 500(SPX) was recently up less than 1 point to 2,004.
The benchmark hit an intraday record above 2,006 just after the
opening bell, then eased back.
The Dow Jones Industrial Average(DJI) slipped 14 points, or
0.1%, to 17,085, while the Nasdaq Composite(RIXF) gained 14 points,
or 0.3%, to 4,594.
The action comes after the S&P ended with its 32nd record
close this year on Friday. It also finished the month 3.8% higher,
representing the benchmark's best August performance since 2000. On
Monday, the U.S. stock market was closed for the Labor Day
holiday.
What strategists are saying: The S&P 500 topped 2,000 for
the first time last week, and now analysts are already talking
about the next milestone. Morgan Stanley economists and equity
strategists said in a note on Tuesday that "a materially higher
U.S. stock market with an S&P peak near 3,000 is possible," if
the U.S. recovery continues.
"The current expansion is more than five years old, and with
little evidence of global synchronicity, there are no signs as yet
that the global economy is overheating," they said.
Manufacturing momentum: The data highlight on Tuesday is the
Institute for Supply Management manufacturing reading, and that
figure came in at 59.0%, easily topping the consensus forecast from
economists polled by MarketWatch. U.S. manufacturing companies grew
in August at the fastest pace since March 2011, according to the
ISM report.
Construction spending jumped 1.8% in July, also above
expectations, and the final reading for Markit's U.S. manufacturing
purchasing managers index was 57.9 in August, down slightly from
the flash reading of 58.0.
This week's biggest economic news is expected to be Friday's
jobs report. (Read more: Ahead of jobs data, U:S: economy still
hitting speed bumps
http://www.marketwatch.com/story/us-economy-still-hitting-speed-bumps-2014-08-31.)
Movers and shakers: Staples Inc. (SPLS) rose 5.4%, performing
best among S&P 500 stocks, while Regeneron Pharmaceuticals Inc.
(REGN) climbed 4.5% for the second-best gain.
Staples climbed after Credit Suisse hiked its rating for the
retailer to outperform from neutral. Regeneron advanced following
encouraging data on a cholesterol-lowering drug, according to a Dow
Jones Newswires report.
Apple Inc. (AAPL) gained 1.1% and hit another intraday record,
as buzz builds ahead of a Sept. 9 event at which the highly
anticipated iPhone 6 and possibly the iWatch are expected to be
unveiled.
Dollar General Corp. (DG) added 1.4% after the discount retailer
lifted its offer for rival Family Dollar Stores Inc. (FDO) to $80 a
share from $78.50 a share. Family Dollar shares rose 0.6%.
(Read more about today's jumpiest stocks in the Movers &
Shakers column
http://www.marketwatch.com/story/apple-may-enter-mobile-payments-tesla-enters-china-2014-08-29.)
Other markets: Asian equities closed mainly higher, while
European stocks wavered between gains and losses.
Metals prices declined across the board, while oil prices moved
sharply lower as well. The dollar advanced against most major
currencies. The euro (EURUSD) reached a one-year low against the
dollar amid uncertainty ahead of the European Central Bank meeting
on Thursday.
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