S&P fail­ing in reach­ing year-old record

Pakistan Observer - - ECONOMY WATCH -

NEW YORK—As the an­niver­sary of the S&P 500’s high mark ap­proaches, the bench­mark U.S. stock index’s lat­est rally has stalled and failed to breach a key level, prompt­ing some calls for sell-offs, at least in the short term. The rally, which started in mid-Fe­bru­ary and fiz­zled in late April, took the S&P 500 just shy of its record close set May 21, 2015. The index trades at nearly 17 times the es­ti­mated earn­ings of its com­po­nents over the next year - still as ex­pen­sive as at its peak and in the two at­tempts since to breach it. The lat­est rally was driven by more com­pa­nies than a year ago, some­thing viewed as a pos­i­tive by both mar­ket tech­ni­cians and those who deal with fun­da­men­tals. It was not, how­ever, enough to cat­a­pult the S&P to new highs.

The S&P rose al­most 17 per­cent from its two-year low hit in mid-Fe­bru­ary to this year’s high mark of 2,111 in April. “Seems ev­ery time we get up here the mar­ket runs out of steam, in­vestors start to worry about val­u­a­tion,” said Paul Hickey, co-founder of re­search firm Be­spoke In­vest­ment Group in Har­ri­son, New York. Val­u­a­tion is not the only rea­son to sell but it is “hard to jus­tify adding new money,” he added. Hickey said earn­ings need to catch up to val­u­a­tions, some­thing that most an­a­lysts ex­pect to hap­pen in the se­cond half of the year ac­cord­ing to the lat­est es­ti­mates com­piled by Thom­son Reuters I/B/E/S.—Agen­cies

CHINIOT: Labour­ers un­load­ing wheat from a truck at Grain Mar­ket.

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