S&P failing in reaching year-old record
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.