- POSTED: 14 May 2014 05:03
The Dow and S&P 500 on Tuesday edged to record closing highs for the second day in a row even as the Nasdaq fell on concerns technology stocks are overvalued.
NEW YORK: The Dow and S&P 500 on Tuesday edged to record closing highs for the second day in a row even as the Nasdaq fell on concerns technology stocks are overvalued.
The Dow Jones Industrial Average advanced 19.97 points (0.12 per cent) to 16,715.44, while the S&P 500 added 0.80 points (0.04 per cent) at 1,897.45 after breaching 1,900 for the first time.
But the Nasdaq Composite Index dropped 13.69 points (0.33 per cent) to 4,130.17.
The Nasdaq has underperformed the other two indices since early March on worries that tech-sector earnings will not live up to lofty expectations.
Jack Ablin, chief investment officer at BMO Private Bank, said a report showing US retail sales rose by just 0.1 per cent in April was "modestly disappointing given that many investors are expecting an economic acceleration in the US."
Ablin said the tumble on the Nasdaq was a result of "expensive" valuations for Nasdaq and small-cap stocks.
"Investors get squeamish when expectations are this high," he said.
Valeant moved ahead with its effort to acquire Botox maker Allergan despite being rebuffed. Valeant chief executive J. Michael Pearson said the Canadian company would "improve our offer" for Allergan based on shareholder feedback to a May 28 conference call.
Allergan rose 1.0 per cent, while Valeant dipped 0.4 per cent.
Pfizer's chief executive faced tough questioning by a British parliamentary panel over potential job cuts due to its proposed acquisition of British pharmaceutical company AstraZeneca. But the chief of AstraZeneca, which has refused to enter merger discussions, would not rule out a deal if terms were changed. Pfizer rose 0.2 per cent.
Dow member AT&T is close to a deal to acquire satellite-television provider DirecTV for around US$50 billion, US media reported. AT&T fell 1.0 per cent, while DirecTV declined 1.2 per cent.
Keurig Green Mountain got a lift after Coca-Cola increased its stake in the coffee company from 10 to 16 per cent. The two companies are collaborating on a device to make cold drinks at home. Keurig Green Mountain rose 7.6 per cent, while Coca-Cola gained 0.7 per cent.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.62 per cent from 2.66 per cent, while the 30-year declined to 3.45 per cent from 3.49 per cent. Bond prices and yields move inversely.