Stocks pause in record territory after slow trading

NEW YORK — U. S. stocks drifted further into record heights in a listless day of trading on Tuesday, as Wall Street waits for the heavyweight economic data coming at the end of the week.

The S& P 500 inched up by 1.19 points, or less than 0.1%, to 4,291.80 and added to its all-time high set a day earlier. More stocks fell than rose within the index, but gains for tech companies made up for weakness for banks and utilities.

The Dow Jones Industrial Average edged higher by 9.02 points, or less than 0.1%, to 34,292.29. The Nasdaq composite added 27.83, or 0.2%, to its record high from a day before and finished at 14,528.33.

Stocks have set their recent records on optimism that the economy is strengthening and that the Federal Reserve will keep interest rates low for a while longer.

A report released Tuesday morning showed a measure of confidence among U. S. consumers is continuing to rise, beating economists’ expectations for a slight decline. That’s key for an economy made up mostly of spending by consumers.

A separate report showed that home prices across the country rose again in April, continuing their blistering pace.

With one day left in June, the market is getting ready to close out a strong first half of the year. The S& P 500 is on track for a gain of 14.3%, more than double its average for a full year, going back to the start of the millennium.

Technology stocks did much of Tuesday’s heavy lifting for the broader market. Apple rose 1.2%, and Microsoft gained 1%.

Major banks announced plans to return billions of dollars to their shareholders through dividend increases and stock buybacks after passing the Federal Reserve’s most recent “stress tests.”

Morgan Stanley rose 3.4% after announcing a doubling of its dividend and plans to buy back $12 billion of its own stock. Other bank stocks were mixed following their own announcements. Goldman Sachs rose 1.1%, but Bank of America fell 1.6%. As a group, financial stocks in the S&P 500 fell.

The big piece of economic data this week will be Friday’s jobs report for June. Economists expect it to show U. S. employers created 675,000 more jobs than they cut, with the unemployment rate falling to 5.7%.

Job growth has been choppy recently, with gains falling disappointingly short of economists’ expectations in recent months. That’s key because the Fed is likely to keep up its support for the economy through low interest rates as long as the job market looks like it needs help.

“This Friday’s unemployment number is pretty important because its going to determine the trajectory of when the Fed is actually going to adjust its policies,” said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management.

The central bank, meanwhile, has stuck by its position that high inflation is likely to be only temporary. That would allow it to keep interest rates low for longer than it otherwise would.

Long- term bond yields have leveled out after jumping earlier in the year in part because of inf lation concerns. The yield on the 10-year Treasury dipped to 1.47% from 1.48% late Monday.

Investors have been weighing possible risks to the rally that drove equities up more than 90% from last year’s lows amid expectations that this quarter will mark the peak of a profit recovery from the depths of the pandemic. BlackRock Investment Institute strategists are dialing down their excitement for U. S. stocks, saying that potentially higher taxes and more regulations could pose “challenges” to the market.

“Investors are probably taking a minute to reassess their near- term outlook,” said Adam Phillips, managing director of portfolio strategy at EP Wealth Advisors. “With momentum fading, stocks likely need a meaningful catalyst from here.”