By Saumya Vaishampayan
U.S. stocks were little changed Wednesday, pausing after two
sessions of declines.
The S&P 500 index lost one point to 2098. The Nasdaq
Composite added five points, or 0.1%, to 4981.
The Dow Jones Industrial Average slipped 19 points, or 0.1%, to
18049. The Dow was pressured by DuPont Co., whose shares fell 6%.
Without DuPont, the Dow would be slightly positive. DuPont defeated
Trian Fund Management L.P.'s campaign to land board seats, as
shareholders re-elected all of DuPont's sitting directors.
Wednesday's moves marked a continuation of back-and-forth action
in the stock market.
"We've been in a 3% range for the last five months" on the
S&P 500, said Jeffrey Yu, head of single-stock derivatives
trading at UBS. "Investors who are on the higher end of their
equity allocation are unlikely to continue to add to their
positions until the market breaks out to new highs," he added.
As of Tuesday's close, the S&P 500 was 0.9% below its most
recent record.
Eurozone data indicated a modest economic recovery is in place.
Eurozone growth in the first three months of the year expanded at
its fastest pace in almost two years, data showed Wednesday. It was
the first time since the first half of 2010 that all four of the
region's largest economies recorded growth. European stocks,
however, ended lower as the euro rallied. Germany's DAX fell 1.1%
and France's CAC 40 lost 0.3%.
Investors are watching for signs that economic growth is picking
up, both in the U.S., after a slow start to the year, and overseas.
Wednesday's eurozone data suggested the European Central Bank's
stimulus program is helping jump-start growth. Strong economic
growth brightens the outlook for corporate profits and stock-market
returns.
"If you put all the data points together, coupled with stimulus
coming out from central banks globally, it suggests that global
demand should pick up," said Quincy Krosby, market strategist at
Prudential Financial. "If demand picks up, even at the margin, it's
a net positive for multinationals," she added.
In U.S. economic news, the Commerce Department said Wednesday
U.S. retail sales were flat in April at $436.8 billion. Economists
surveyed by The Wall Street Journal had expected a 0.2% increase in
April. Retail sales in March were revised to 1.1% growth from 0.9%
previously.
Investors said that while Wednesday's retail sales report was
disappointing, it did little to shift their full-year views. Many
of the factors weighing on growth at the start of the year, such as
the West Coast port strike and harsh weather, are likely to prove
temporary.
"If our view here is right, and pent-up demand leads to stronger
U.S. growth in the back half of this year, you can still end up
with a strong year of global growth, especially if Europe continues
on this path," said Joseph Tanious, investment strategist for
Bessemer Trust, which oversees about $105 billion. "That ultimately
bodes well for risk assets, " he added. Mr. Tanious said he expects
stocks to gain this year, but at a slower pace than in recent
years.
Utilities stocks in the S&P 500 fell the most, down 1.1%.
Technology stocks in the index rose 0.5%, leading gainers.
Matthew Kaufler, who oversees about $2 billion as a portfolio
manager at Federated Investors, said he recently added to his
overweight position in the materials sector, part of a play on
lower natural-gas prices.
While those prices have gained recently, they remain down about
39% from last summer, as of Tuesday's settlement. Natural gas is a
main ingredient in many of these companies' products, and so
companies in the materials sector often enter into agreements to
buy the commodity at a fixed price, Mr. Kaufler said. "Those
contracts were entered into at a time when natural gas was
significantly higher...and for some companies are now expiring, so
they're going to enjoy the benefit of much lower gas prices," he
said.
Asian stocks were mixed Wednesday. Japan's Nikkei Stock Average
rose 0.7%, while Hong Kong's Hang Seng Index lost 0.6%. The
Shanghai Composite fell 0.6%.
The yield on the 10-year Treasury note was 2.275%, compared with
2.256% on Tuesday. Yields rise as prices fall.
In commodity markets, crude-oil futures fell 0.8% to $60.25 a
barrel. Gold futures rose 1.8% to $1213.80 an ounce.
In corporate news, pipeline giant Williams Cos. agreed to
acquire Williams Partners L.P. in an all-equity transaction that
values Williams Partners at about $33 billion. Shares of Williams
Cos. rose 5% and those of Williams Partners jumped 21%.
Danaher Corp. said it has agreed to buy Pall Corp. for about
$13.6 billion and unveiled plans to split itself into two public
companies. Danaher shares rose 1.2% and Pall shares gained
4.5%.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
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