U.S. stocks were little changed, with benchmark indexes near record levels, as health-care shares sank to offset gains among energy producers and investors weighed whether the recent rally in equities may have been overdone.
The Nasdaq Biotechnology Index lost 2 percent, led by a slump of 4 percent at Biogen Idec Inc. Energy shares trimmed a weekly decline as oil rallied from a 2010 low. Baker Hughes Inc. extended gains after confirming it is in talks with Halliburton Co. for a potential “business combination.” Amazon Inc. added 3.5 percent after ending a dispute with Hachette Book Group. Newmont Mining Corp. climbed 5 percent as the price of gold rose.
The Standard & Poor’s 500 Index (SPX) rose less than one point to to 2,039.82 at 4 p.m. in New York to close at an all-time high. The Dow Jones Industrial Average slid 18.05 points, or 0.1 percent, to 17,634.74 after closing yesterday at a record. Both gauges advanced
0.4 percent in the past five days to cap a fourth week of gains. The Nasdaq 100 Index added 0.3 percent for a fifth day of gains. It rose 1.6 percent this week to a 14-year high.
About 6 billion shares changed hands on U.S. exchanges today, 7.4 percent below the three-month average.
“Retail sales were good and the preponderance of the evidence is we’re continuing on the path we’ve been on which is an improving economy,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “All those great things are no secret, though, and that’s priced into stocks right now. The thing that gives me pause is valuations.”
Recent Rally
The S&P 500 rallied 9.5 percent from a six-month low in October to a record on Nov. 11 as corporate earnings topped estimates and economic data showed the U.S. economy was weathering a global slowdown as the Federal Reserve ended its bond-buying program. The index trades at 17 times projected earnings, its highest valuation since December 2009.A report from the Commerce Department today showed retail sales in October increased 0.3 percent after a 0.3 percent drop in September, as American consumers ate out and shopped for clothes, enjoying a windfall from cheaper gasoline.
The median forecast in a Bloomberg survey of 86 economists projected a 0.2 percent advance. Eleven of 13 major categories showed gains, indicating broad-based growth.
Preliminary data showed the Thomson Reuters/University of Michigan Index of consumer sentiment increased to 89.4 this month from 86.9 last month, according to another survey. The gain topped estimates in a Bloomberg survey.
Happened Already
“People are looking for a holiday rally and may be asking if it’s happened already,” Robert Pavlik, who helps oversee $4.5 billion as chief market strategist at Banyan Partners LLC in New York, said by phone. “The small retail beat isn’t going to do it. We’re going to see a little pause. We can’t continue to climb up this ladder forever.”Concern that slowing growth outside the U.S. will hurt the economy persists. The world economy is in its worst shape in two years, with the euro area and emerging markets deteriorating and the danger of deflation rising, according to a Bloomberg Global Poll of international investors.
Much of the concern is again focused on the euro area: Almost two-thirds of those polled said its economy was weakening while 89 percent saw disinflation or deflation as a greater threat there than inflation over the next year.
Little Changed
U.S. stocks were little changed yesterday as better-than-estimated results from Wal-Mart Stores Inc. and deals news boosted large stocks. The Russell 2000 Index of small companies tumbled 0.9 percent to halt a six-day advance as investors sold the recent rally’s biggest winners. Energy shares sank as the price of oil continued its collapse into a bear market.Six of the 10 main S&P 500 groups advanced today. Energy producers rose 0.8 percent to trim a decline this week to 2 percent. U.S. crude advanced from the lowest level since 2010.
Baker Hughes rose 1.9 percent to $59.89 after confirming that “it has engaged in preliminary discussions with Halliburton Co. regarding a potential business combination transaction.”
The stock jumped 15 percent yesterday after people with knowledge of the matter said talks are on for one of the largest deals involving a U.S. energy company and an announcement could be made in weeks.
Halliburton added 2.4 percent to $55.08.
Newmont Mining gained 5 percent to $19.15 for the biggest gain in the S&P 500. Gold had its best advance in a week.
Consumer Stocks
Nordstrom Inc. advanced 1.3 percent to $74.17 after the fashion retailer reported third-quarter earnings of 73 cents, topping analysts’ estimates of 71 cents.Nike Inc. (NKE) fell 0.7 percent to $95.50. The world’s largest sporting-goods maker was lowered to neutral, or hold, from buy at Sterne Agee.
Applied Materials Inc. rose 0.9 percent to $22.82. The largest maker of machines used to build semiconductors forecast fiscal first-quarter profit and sales that may fall short of some estimates as customers hold off on adding new capacity.
Amazon.com Inc. advanced 3.5 percent to $327.69 as the online retailer ended a dispute with Hachette Book Group over print and digital book sales. Amazon’s dispute with Hachette focused on how much to charge for e-books and how the revenues should be shared.
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