By Anora Mahmudova, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market closed
marginally higher on Tuesday, after retreating from intraday highs
set in early morning trade. The benchmark S&P 500 traded in a
narrow range the entire session amid low volumes, according to
FactSet.
Still, the S&P 500 and Dow Jones Industrial Average closed
at record levels for the second straight day.
The S&P 500 (SPX) finished less than a point higher at
1,897.45. The Dow Jones Industrial Average (DJI) rose for the fifth
consecutive session and closed 19.97 points, or 0.1%, higher at
16,715.44.
The Nasdaq Composite (RIXF) ended the day down 13.69 points, or
0.3%, at 4,130.17.
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action.
"Retail sales data were soft, but still pointed to modest signs
of improvement in the economy," said Terry Sandven, chief equity
strategist at U.S. Bank Wealth Management.
Sandven, who had written about U.S. equities in a slow growth
environment, said that recent rallies in cyclical stocks might
signal bottoming or near bottoming of the rotation into defensive
stocks.
"We expect cyclicals to outperform from here on and broader
markets are likely to move sideways with an upward balance," he
added.
Investors had several economic reports to asses on Tuesday. The
most important among them was retail sales, which were softer than
expected. American consumers barely increased spending at retail
stores in April after splurging in March following a brutally cold
winter. Sales at retailers rose a scant 0.1% in April, the Commerce
Department said Tuesday.
Ian Shepherdson, chief economist at Pantheon Macroeconomics,
wrote that a late Easter this year boosted core sales in March and
depressed them in April.
Inventories at U.S. businesses rose 0.4% in March, slightly
below forecasts, the Commerce Department said Tuesday.
The prices paid for imported goods fell a seasonally adjusted
0.4% in April after a revised 0.4% gain in March, the U.S. Labor
Department said Tuesday.
Separately, small-business sentiment in May rose to the highest
level in more than six years, the National Federation of
Independent Business said Tuesday.
Keurig jumps, Elizabeth Arden plummets on earnings miss
In corporate news, shares of coffee-machine maker Keurig Green
Mountain Inc. (GMCR) jumped 7.6% after an SEC filing showed that
Coca-Cola Co. (KO) increased its stake in Keurig to 16% from
10%.
Rackspace Hosting Inc. (RAX) shares jumped 7.7% after the
cloud-computing provider late Monday reported first-quarter
earnings that topped estimates. Per-share earnings came in at 18
cents on sales of $421 million.
Shares of McKesson Corp. (MCK) rose 3.2% after the
pharmaceutical distributor posted better-than-expected adjusted
earnings for the fourth quarter.
Elizabeth Arden Inc. (RDEN) plummeted 16% after the
beauty-products company reported weaker-than-expected results.
Shares of home builder stocks rallied after news that Fannie Mae
(FNMA) and Freddie Mac (FMCC) won't have to lower the limits for
home loans that they back. D.R. Horton Inc. (DHI) closed up 2.2%,
Lennar Corp. (LEN) added 1.4%, and PulteGroup Inc. (PHM) rose
1.4%.
China, German data disappoint
In overseas markets, the Shanghai Composite Index eased 0.1%
after data were released showing China's industrial production
slowed in April while retail-sales growth also fell in March. Both
sets of data slightly missed forecasts. (Read more in the Asian
Stocks recap blog:
http://blogs.marketwatch.com/thetell/2014/05/12/asia-stocks-live-blog-rallying-into-china-data/?link=instory.)European
stocks closed higher.
Across other markets, crude-oil futures for June delivery (CLM4)
rose sharply, while gold for June delivery (GCK4) fell. The ICE
dollar index (DXY) was slightly higher at 80.12.
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