By Victor Reklaitis and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market pulled back
Tuesday, but Staples jumped after an upgrade and Apple, Tesla and
Regeneron also climbed.
A reading on U.S. factory activity surpassed expectations, but
didn't spark a rally for the main indexes.
"A lot of that was probably already built into the market," said
Bruce Bittles, chief investment strategist at Robert W. Baird &
Co., noting that stocks achieved strong gains in August partly in
anticipation of such upbeat economic data.
The S&P 500(SPX) was recently down 5 points, or 0.2%, to
1,999. The benchmark hit an intraday record above 2,006 just after
the opening bell, then traded roughly flat before turning modestly
negative.
The Dow Jones Industrial Average(DJI) fell 44 points, or 0.3%,
to 17,055, while the Nasdaq Composite(RIXF) gained 3 points, or
0.1%, to 4,583.
Tuesday's action for the main indexes comes after the S&P
500 nabbed its 32nd record close this year on Friday. It 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.
Movers and shakers: Staples Inc. (SPLS) jumped 7%, performing
best among S&P 500 stocks, while Regeneron Pharmaceuticals Inc.
(REGN) climbed 3.6% 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 0.7% 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.
Tesla Motors Inc. (TSLA) jumped 4.8%, also hitting an intraday
record, as Stifel Nicolaus hiked its rating for the maker of
electric cars to buy and set a $400 price target.
Wynn Resorts Ltd. (WYNN) fared worst among S&P 500 stocks,
losing 5.4%. Casino operators dropped following news of an August
decrease in gambling revenue in Macau.
(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.)
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.
The U.S. stock market is likely to keep "grinding higher,"
helped by foreign investors for whom it's "the only place to go,"
said Baird's Bittles. But investors should remain aware of risks in
the market, including the fact that zero interest-rate policies
mean central bankers can't lower rates to counter outside shocks,
according to Bittles.
Manufacturing momentum: The day's data highlight 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.)
Other markets: Asian equities closed mainly higher, while
European stocks finished narrowly mixed.
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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