The S&P 500 notched another record high on Tuesday amid bullish economic data but retreated toward the flat line later in the session as Wall Street continued its recent period of low volatility.
The broad market index ticked up less than 0.1% to 4,291.80, good enough for its fourth-straight record close. The Dow Jones Industrial Average finished with a gain of about 9 points after being up more than 100 points earlier in the session, closing at 34,292.29. The tech-heavy Nasdaq Composite added about 0.2% for its own record of 14,528.33.
Homebuilder stocks moved higher after S&P Case-Shiller said home prices rose more than 14% in April compared to the prior year. Five U.S. cities, including Seattle, saw their largest annual increase on record. Shares of PulteGroup rose 2%.
Semiconductor stocks gained strength later in the session, with Skyworks and Advanced Micro Devices climbing 4.5% and 2.8%, respectively. General Electric boosted the industrials sector, rising over 1% after Goldman Sachs named the stock a top idea.
The market has churned out a series of record highs in recent weeks, but the gains have been relatively modest and some strategists have pointed to weak market breadth, measured by the performance of the average stock and the number of individual names making new highs, as a potential area of concern.
On Tuesday, there were slightly more declining stocks in the S&P 500 than those that rose during the session.
However, the diminished breadth and volatility could simply be a natural pause during the summer months ahead of the busy earnings season in July, said Bill McMahon, the chief investment officer for active equity strategies at Charles Schwab Investment Management.
"I think people are in a little bit of a wait-and-see mode, so it's not surprising to see volatility decline and breadth worsen a tad," McMahon said, adding that concern about the spreading Delta variant of Covid-19 could also be weighing on stocks.
Shares of Morgan Stanley jumped more than 3% after the bank said it will double its quarterly dividend. The bank also announced a $12 billion stock buyback program. The announcement follows last week's stress tests by the Federal Reserve, which all 23 major banks passed. However, some other bank stocks gave up early gains and weighed on the broader indexes despite increasing their own payout plans.
The Conference Board's consumer confidence reading for June came in higher than expected, adding to the bullish readings about the economic recovery.
With the market entering the final trading days of June and the second quarter, the S&P 500 is on track to register its fifth straight month of gains. The Nasdaq is pacing for its seventh positive month in the last eight. The Dow, however, is in the red for the month, and on track to snap a four-month winning streak.
So far in 2021, the S&P 500 has added 14%, while the Nasdaq has added more than 12% with the Dow close behind.
JPMorgan quantitative strategist Dubravkos Lakos-Bujas said on CNBC's "Squawk Box" that the market appeared to have near-term upside.
"The growth policy backdrop in our opinion still remains supportive for risk assets in general, certainly including equities. At the same time, the positioning is not really stretched to where we are in a problematic territory. So we do think there is still a runway. ... The summer period, the next two months, is where I think the market continues to break out," the strategist said.
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June 29, 2021 at 05:02AM
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Stocks close little changed despite strong readings for home prices and consumer confidence - CNBC
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