By Victor Reklaitis and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks mostly pulled back
Tuesday, as the S&P 500 lost a little steam after achieving a
record close on Friday.
A reading on U.S. manufacturing topped expectations but didn't
spark an advance, with the stock market instead starting off
September on a down note.
"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) edged down 1.09 points, or less than 0.1%,
to 2,002.28, staying above the milestone level of 2,000. The
benchmark hit an intraday record just over 2,006 shortly after the
opening bell, but then turned negative.
The Dow Jones Industrial Average(DJI) fell 30.89 points, or
0.2%, to 17,067.56, while the Nasdaq Composite(RIXF) gained 17.92
points, or 0.4%, to 4,598.19.
Movers and shakers: Staples Inc. (SPLS) jumped 8.1%, performing
best among S&P 500 stocks, after Credit Suisse hiked its rating
for the retailer to outperform.
Apple Inc. (AAPL) ended up 0.8% at an all-time closing high, as
buzz builds around a Sept. 9 event where the iPhone 6 is expected
to be unveiled. Tesla Motors Inc. (TSLA) jumped 5.3%, also
achieving a closing record, as Stifel Nicolaus hiked its rating for
the car company to buy and set a $400 price target.
Wynn Resorts Ltd. (WYNN) fared worst among S&P 500 stocks,
losing 4.1%. Casino operators fell following news of an August drop
in gambling revenue in Macau.
(Read more about the day'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 analysts already are 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.
The 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.
A pullback by the market isn't surprising given the liquidity
that's built up from the Federal Reserve's stimulus efforts, said
Colin Cieszynski, chief market strategist at CMC Markets. "It's
been defying gravity a little bit," he told MarketWatch.
He predicted a "choppy, churny phase" for stocks for at least a
couple of months, noting that September historically has been a
weak period for equities. (Read more: Look upon September with
caution
http://www.marketwatch.com/story/why-september-may-slow-further-sp-records-2014-09-01.)
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. 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. The
greenback "exploded against everything," said CMC's Cieszynski.
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