Wall Street slips af­ter S&P 500 hits 4-year high

The Pak Banker - - COMPANIES/BOSS -

Stocks fell af­ter the S&P 500 hit its high­est level in four years as the bench­mark in­dex faced tech­ni­cal re­sis­tance and traders cashed in re­cent gains. The S&P 500 in­dex hit 1,426.68, its high­est in­tra­day rise since May 2008. Vol­ume has been light, as ex­pected in Au­gust, and only three of the past 12 ses­sions have seen moves of 0.25 per­cent or more by the S&P.

"It's not un­com­mon that you run into some re­sis­tance at new highs," said Jim Paulsen, chief in­vest­ment of­fi­cer at Wells Cap­i­tal Man­age­ment in Min­neapo­lis. "Traders sort of play for a while to see which way the mar­ket is ul­ti­mately go­ing to re­solve it­self."

Stocks rose early in the ses­sion and the euro ral­lied to a seven-week high against the U.S. dol­lar, bol­stered by talk that the Euro­pean Cen­tral Bank will act to lower Span­ish and Ital­ian bor­row­ing costs. Bets on ac­tion from cen­tral banks in sup­port of their stalling economies have helped move stocks higher. How­ever, U.S. stocks lost mo­men­tum af­ter the first hour as traders took prof­its. The slow but steady climb over the past six weeks was partly due to bet­ter-than-ex­pected data, in­clud­ing pay­rolls, re­tail sales and hous­ing num­bers that coun­tered a pre­vi­ous string of dis­ap­point­ments.

"The U.S. econ­omy is show­ing signs of pick­ing up again," said Wells Cap­i­tal's Paulsen. Still, he said ma­jor in­dexes will likely stall un­til the end of the month.

He sees eq­ui­ties "tee­ter­ing around this high un­til Septem­ber, then we de­cide if the mar­ket is in­deed mak­ing a move higher or if it's go­ing to fail." The Fed­eral Re­serve and ECB hold sep­a­rate pol­icy meet­ings next month that could de­cide whether fur­ther stim­u­lus to the U.S. re­cov­ery and mea­sures to con­trol the euro zone debt cri­sis are com­ing.

The Dow Jones in­dus­trial av­er­age (^DJI) fell 68.06 points, or 0.51 per­cent, to 13,203.58. The S&P 500 In­dex (^GSPC) dropped 4.96 points, or 0.35 per­cent, to 1,413.17. The Nas­daq Com­pos­ite (^IXIC) lost 8.95 points, or 0.29 per­cent, to 3,067.26.

The CBOE Volatil­ity In­dex (^VIX) or VIX, Wall Street's fear barom­e­ter, was up 7.4 per­cent at 15.05 af­ter hit­ting a fiveyear low of 13.30 last week. Tech­nol­ogy stocks were among the day's un­der­per­form­ers.

Face­book Inc (FB.O) di­rec­tor Peter Thiel sold roughly $400 mil­lion worth of shares in the online so­cial net­work­ing com­pany last week, cash­ing out most of his stake. The sale comes as Face­book's stock lost 50 per­cent of its value since its IPO ear­lier this year. In the ses­sion, Face­book shares fell 4.3 per­cent to $19.16.

Best Buy Co (BBY) shares slightly pared losses af­ter fall­ing to $16.25 to nine-year low. The com­pany sus­pended its profit out­look and share buy­backs for the year. Shares closed down 1.4 per­cent at $17.91.

Shares of cloth­ing re­tailer Ur­ban Out­fit­ters (URBN) rose 18.2 per­cent to $36.98 af­ter sev­eral bro­ker­ages raised their price tar­gets on the stock.

Af­ter the clos­ing bell, shares of Dell Inc (DELL) fell 3.7 per­cent to $11.88 af­ter the No. 2 U.S. PC maker nar­rowly missed rev­enue es­ti­mates."

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