By Saumya Vaishampayan and Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks in May posted the biggest
monthly gains since February, with the S&P 500 and Dow Jones
Industrial Average finishing the month at records.
Both the Nasdaq Composite and Dow in May turned positive for the
year.
The S&P (SPX) closed up 3.5 points, or 0.2%, to 1,923.57.
The benchmark index gained 1.2% for the week and 2.1% in May.
The Dow (DJI) rose 18.4 points, or 0.1%, to 16,717.17. The
blue-chip index notched a weekly gain of 0.7% and gained 0.8% for
the month.
The Nasdaq (RIXF) fell 5.3 points, or 0.1%, to 4,242.62. The
tech-heavy index ended with a 1.4% gain for the week and a 3.1%
gain in May. The monthly gain was the index's first in three
months.
Kristina Hooper, U.S. investment strategist at Allianz Global
Investors, said today's cautious mood in the market is colored by
how low the 10-year Treasury yields are.
"Many investors are struggling to understand why 10-year yields
are below 2.5% and whether they are signaling something they don't
know. While historically such low rates signal a weakening economy,
we think there are other reasons behind it, such as lower supply
and attractiveness compared to other safe government bonds," Hooper
said.
"We believe the environment for stocks is still good, as rates
are low and inflation is low. Tapering of the QE appears fully
priced in and all eyes are on the Fed funds rate," she added.
In economic news, consumer spending in the U.S. fell in April --
the first decline in a year -- as Americans cut back on car
purchases and spent less on utilities such as natural gas and
electricity as the weather warmed up. Meanwhile, inflation
pressures continued to build last month. MarketWatchSpending on
energy plunged by 3% in April, leading to the first drop in
consumer spending in a year. Excluding energy, spending rose
0.1%.Why economists aren't freaking out about the negative GDP
numbers
Separately, a gauge on consumer sentiment fell in May, according
to a report from the University of Michigan and Thomson Reuters.
Economists polled by MarketWatch had expected a final May level of
82.5, compared with a preliminary reading for the month of
81.8.
Big Lots surges, Express tumbles after quarterly results
Among major movers, Big Lots Inc. (BIG) surged 13% after the
retailer raised its outlook for the current fiscal year, while
first-quarter revenue beat expectations.
Ann Inc. (ANN) rose 4% after the apparel retailer reported
first-quarter adjusted profit that slightly beat Wall Street
forecasts.
Express Inc. (EXPR) shares tumbled 7.5% after the retailer
posted a fall in first-quarter profit.
An even bigger loser was Infoblox Inc. (BLOX). Shares plummeted
37% after the network-control company said Chief Executive Robert
Thomas was stepping down. Revenue for the first quarter fell short
of expectations.
Apple Inc. (AAPL) shares were down 0.4%. Goldman Sachs raised
its price target on the stock to $720 from $635. Read: Apple hits
new "Beats" ahead of WWDC
Overseas and other financial markets
In overseas markets, European stocks posted their seventh week
of gains, while Asian stocks closed mostly lower. Gold futures
(GCQ4) posted their worst monthly losses this year and crude for
July delivery (CLN4) fell.The dollar (DXY) declined against its
European rivals.
More must-reads from MarketWatch:
Get set for summer melt-up, then a 'nasty correction'
Stocks could fall 15% to 20% as 'QE fluff' comes out of the
market
How to know if the stock market has reached a top
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