By William L. Watts, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks finished little changed on
Monday, although the Dow Jones Industrial Average managed to eke
out its 51st record close of 2013 in the next-to-last trading
session of the year, while shares of Twitter extended a
decline.
Volume was thin, with investors finding little fuel to push the
market either way, while formerly highflying Twitter Inc. shares
had their wings clipped for a second straight day.
The S&P 500 (SPX) declined 0.33 point, or less than 0.1%, to
finish at 1,841.07, leaving it on track for an annual percentage
gain of more than 29% and its biggest annual rise since 1997.
The Dow (DJI) ended the day near its session high with a gain of
25.88 points, or 0.2%, at 16,504.29. The rise was enough to take
out the previous record-high close set on Thursday and leaves the
index up more than 26% for the year.
The Nasdaq Composite index (RIXF) shed 2.40 points, or 0.1%, to
4,154.20. This year's rally has left the index at levels last seen
in 2000 and headed for an annual rise of 37.6%.
A strong finish to a robust year has investors worrying the
market may be overdue for at least a near-term pullback, analysts
said, noting high levels of margin debt and bullish sentiment.
While a pullback wouldn't be a shock, the market's recent
performance doesn't necessarily bode poorly for 2014, although the
magnitude of any rise isn't likely to match that seen this year,
said Bob Landry, executive director and portfolio manager at USAA
Investments in San Antonio.
Landry said he's cautiously optimistic the market will push
higher in 2014 as economic growth continues to improve, barring any
"policy mistakes" out of Washington, D.C., or some unforeseen
geopolitical disaster.
The first big test for the market will come in January as
fourth-quarter earnings season gets under way, he said.
Analysts surveyed by FactSet now expect earnings by S&P 500
companies to grow 6.3% in the fourth quarter, which is down from
initial expectations for growth of around 9.5%, Landry noted. If
companies can beat expectations, it would likely help keep the
market chugging along, he said.
The economic calendar remained light on Monday.
The National Association of Realtors said its index of pending
home sales rose 0.2% in November to 101.7, slightly above a
10-month low of 101.5 in October, but down from 103.3 in November
2012. The data had little impact on stocks.
The yield on the 10-year Treasury note (10_YEAR) pushed back
above 3% last week, but slipped in recent action to around 2.98%.
Yields fall as bond prices decline. Rising rates can unsettle
stocks, though a gradual rise in rates driven by improving economic
growth could likely be taken in stride, analysts said.
Among blue chips, Walt Disney Co. (DIS) led the way with a 2.5%
gain. Oil producers Exxon Mobil Corp. (XOM) , down 1.2%, and
Chevron Corp. (CVX)(CVX), off 0.8%, were among the biggest
decliners.
In other action,Twitter (TWTR) fell 5.1%. Shares of the
microblogging platform dropped more than 13% on Friday as analysts
expressed doubts about its highflying performance. Twitter made its
debut in an IPO earlier this year and remains up by around 46% for
the month of December.
Shares of social network Facebook Inc. (FB) were also under
pressure, shedding 3.2%, but remained on track for a nearly 102%
annual rise. Career-oriented social network LinkedIn Corp. (LNKD)
fell 0.8%.
Shares of Crocs Inc. (CROX) soared 21% after Chief Financial
Officer Jeff Lasher said in an interview that Blackstone Group LP
(BX) will invest $200 million in the shoe company and that Chief
Executive John McCarvel will retire by late April.
Cooper Tire & Rubber Co. (CTB) rose more than 5%. The shares
had initially tumbled after the company terminated a $2.2 billion
merger agreement with Indian suitor Apollo Tyres Ltd.
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