S&P 500 hits record as Fed optimism lingers
NEW YORK — The S&P 500 ended at another record high on Thursday, extending gains for a fifth day on investors’ optimism that the Federal Reserve will keep interest rates low for a long period of time.
The S&P 500’s gain was slim, however, with the benchmark index recovering late in the session from earlier losses. Retailers, including Coach, weighed on the index.
The Dow also eked out a gain, while the Nasdaq slipped a day after the Fed lowered its forecast for target U.S. interest rates in the long term
The CBOE Volatility Index or the VIX, Wall Street’s fear barometer, bounced back slightly, ending up 0.1 percent at 10.62, a day after closing at its lowest since February 2007.
“The equity market rallied to an all-time high yesterday so it’s hard to describe it as nervous. I think the pullback this morning was probably more related to just a small bout of profit-taking,” said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.
Energy shares ranked among the biggest gainers. Oil prices ended higher after President Barack Obama said he was sending up to 300 U.S. military advisers to Iraq as the Iraqi government’s troops fought Sunni rebels for control of the country’s biggest refinery. Shares of Chevron Corp added 1.3 percent to $131.99.
Coach Inc’s stock slid 8.9 percent to $35.69 and was the S&P 500’s biggest percentage decliner. The S&P consumer discretionary index slipped 0.2 percent.
The upscale retailer, known for its handbags, said during an investor day presentation that it expected revenue to fall by low double digits in percentage terms for the year ending June 2015. It also said it would close 70 underperforming stores.
The Dow Jones industrial average rose 14.84 points or 0.09 percent, to end at 16,921.46. The S&P 500 gained 2.50 points or 0.13 percent, to close at 1,959.48. The Nasdaq Composite fell 3.51 points or 0.08 percent, to 4,359.33.
The advance marked the S&P 500’s second record close in a row.
Shares of Pier 1 Imports tumbled 13.1 percent to $15.86 after the home decor retailer cut its full-year earnings forecast. Shares of Michael Kors Holdings Ltd , a Coach rival, fell 1.6 percent to $89.36.
“Coach and Pier 1 are having a negative impact on the consumer sector in general and high-end retail specifically,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
On the plus side, U.S.-listed shares of BlackBerry Ltd jumped 9.7 percent to $9.09 after the Canadian smartphone maker reported a smaller-than-expected first-quarter loss.
Analysts said economic data did little to influence the day’s move. Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 312,000, slightly below the 314,000 forecast.
Factory activity in the U.S. Mid-Atlantic region grew at a faster pace than expected in June. The Philadelphia Federal Reserve Bank said its business activity index shot up to 17.8 from 15.4 in May, above the forecast for a reading of 14.
About 5.8 billion shares changed hands on U.S. exchanges, compared with the average of 5.4 billion for the month to date, according to data from BATS Global Markets.