By Victor Reklaitis and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks mostly pulled back
Tuesday, though 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, with the S&P 500 instead catching its
breath after achieving a record close on Friday.
"A lot of that was probably already built into the market," said
Bruce Bittles, chief investment strategist at Robert W. Baird &
Co., referring to the encouraging manufacturing report. He noted
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, slipping back under the milestone level of 2,000. The
benchmark hit an intraday record above 2,006 just after the opening
bell, then traded roughly flat before turning negative.
The Dow Jones Industrial Average(DJI) fell 52 points, or 0.3%,
to 17,046, while the Nasdaq Composite(RIXF) gained 8 points, or
0.2%, to 4,589.
Tuesday's action 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 7.9%, performing
best among S&P 500 stocks, while Regeneron Pharmaceuticals Inc.
(REGN) climbed 4.2% 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 0.9% 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 5.1%, 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 4.9%. 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 strategists said in a note on Tuesday that the
bull market could run for another five years and carry the S&P
close to 3,000. (Read more: Morgan Stanley sees potential for
longest U:S: expansion ever
http://blogs.marketwatch.com/thetell/2014/09/02/bull-could-run-5-more-years-carry-sp-500-close-to-3000-morgan-stanley-says/.)
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 was the
Institute for Supply Management manufacturing reading, and that
came in at 59.0%, easily topping expectations. 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.
The dollar advanced against most major currencies, putting
pressure on dollar-denominated commodity prices. Metals prices
declined across the board, while oil prices moved sharply lower as
well.
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