Stock Market Unchanged After Benchmark Highs
The US stock market was little changed today, after benchmark gauges closed at record levels yesterday, and as private data showed companies added more workers than estimated in June before the government’s official jobs report tomorrow.
By Paolo Palazzi-Xirinachs
Wednesday, July 2, 2014
Benchmark indexes reached records yesterday, with the 30-member Dow rising within two points of 17,000, while the Russell 2000 briefly touched a record. Simultaneous gains in different industries are sometimes cited by chart analysts as evidence economic growth is pervasive enough to fuel additional gains. Stocks are extending a rebound from the selloff earlier this year that started with biotechnology and small-cap stocks. Equities have rallied since the S&P 500 reached a two-month low in April as central bank stimulus spread from Europe to Japan and the US.
Companies in the US added 281K workers to their payrolls in June, figures from the ADP Research Institute showed today. The median projection of 47 economists surveyed by Bloomberg called for an advance of 205K. Fed Chair Janet Yellen said last month that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. She emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation. Yellen said in a speech today that interest rates shouldn’t be the main tool to promote financial stability.
In other economic news, Bank of America advanced 1.6% to $15.85. Deutsche Bank upgraded its recommendation for the second-biggest US lender to buy from hold. Airlines slumped 3.6%, the most among 156 groups in the S&P 500. Delta lost 5.1% to $38.24 as its passenger unit revenue increased 4.5% last month from a year earlier, slowing from a growth rate of 7% in May. Strong domestic travel “offset lower-than-expected international yields driven by industry-wide capacity increases,” Delta said. GoPro Inc. lost 14% to $42.04, the first drop since its initial public offering last week. The maker of wearable cameras surged 20% to $48.80 yesterday, doubling its IPO price in a week. The company’s market value climbed to $6 billion, compared with $2.96 billion in its IPO.
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