By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The S&P 500 popped to an intraday
record above the milestone level of 2,000 on Monday, as U.S. stocks
received a lift from deal activity and hints of more stimulus from
the European Central Bank.
Shares of Burger King Worldwide Inc., Tim Hortons Inc. and
InterMune Inc. surged on merger news, while July new-home sales
came in slightly below expectations, but the government upwardly
revised the June result.
The S&P 500 (SPX) gained 9 points, or 0.5%, to recently
trade at 1,998 after scoring an intraday record just below 2,002.
The benchmark is on pace to close under 2,000, but still achieve an
all-time closing high, topping Thursday's record close at
1,992.37.
All 10 sectors advanced, with financials(XLF) and energy(XLE)
performing best.
The Dow Jones Industrial Average (DJI) climbed 78 points, or
0.5%, to 17,079, while the Nasdaq Composite (RIXF) advanced by 19
points, or 0.4%, to 4,557.
On Friday, stocks finished lower but still achieved a
third-straight up week.
S&P 500 tops 2000: "It's an encouraging thing," said Sam
Stovall, equity strategist at S&P Capital IQ, referring to the
benchmark moving above 2,000 intraday. The index hasn't cleared a
"millennial number" since 1998, when it topped 1,000, he added.
(Read more: How the S&P 500's top 10 changed in the index's
march to 2,000 from 1,000
http://blogs.marketwatch.com/thetell/2014/08/25/how-the-sp-500s-top-10-changed-in-the-indexs-march-to-2000-from-1000/.)
Stovall said that he doesn't think valuations are stretched, and
sides more with Jeremy Siegel's camp rather than Robert Shiller's
-- two well-known market watchers with diverging views. (Read more:
Yale's Shiller and Penn's Siegel are at odds
http://www.marketwatch.com/story/yale-vs-penn-where-are-stocks-headed-2014-08-22.)
In addition, Stovall sounded a cautious note about anemic
summertime trading. "The volume is incredibly low," he told
MarketWatch. That's "a sign of maybe lack of conviction, but I
think at the same time it doesn't necessarily mean things have to
go bad."
Draghi 'whatever it takes' part 2: Inspiration for Monday's
gains came in part from stronger European markets, where the Stoxx
Europe 600 closed higher following ECB President Mario Draghi's
suggestion that further stimulus could be on the way for
Europe.
"[Draghi] was dovish and, to a certain degree, while Yellen and
the rest of the Fed members are preparing for a rate hike next
year, the tone is still that of easy money and so if you have a
flow of easy money coming out of Europe, that is going to help
equity markets here in the States as well," said Peter Cardillo,
chief market economist at Rockwell Global Capital. (Read more:
Draghi's remarks seen as 'major breakthrough'
http://www.marketwatch.com/story/draghi-sparks-optimism-but-dont-ignore-caveats-2014-08-25.)
Draghi's comments, which came Friday after European markets had
closed, and a speech by Federal Reserve Chairwoman Janet Yellen
were initially brushed aside by Wall Street last week.
Another "Merger Monday": Burger King Worldwide Inc. (BKW) shares
jumped 20% following news the hamburger chain is in talks to buy
Canadian coffee-and-doughnut chain Tim Hortons Inc. (THI). The deal
would be set up as a so-called tax inversion, moving Burger King's
tax base to Canada. U.S.-listed shares of Tim Hortons rose 19%.
Also read: Burger King likes more than Tim Hortons' tax rate
Shares of InterMune Inc. (ITMN) soared 36% after
Switzerland-based Roche Holding AG (RHHBY) said Sunday it will pay
$8.3 billion for the California biotech firm.
Shares of Ann Inc.(ANN) rose 6% after activist investor Engine
Capital LP called on the parent of clothing retailer Ann Taylor to
sell itself.
(Read more about Monday's biggest-moving stocks
http://www.marketwatch.com/story/apple-goldman-are-stocks-to-watch-on-monday-2014-08-24.)
Other markets: The euro (EURUSD) fell against the dollar on the
suggestion of more ECB easing as well as a survey that showed
weaker German business confidence. Asian stocks finished mixed,
with Japanese and Hong Kong equities up, but Shanghai stocks down.
Gold and crude oil both slipped, and Monday was a holiday for U.K.
markets.
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