MARKET SNAPSHOT: Dow And Broader Stock Market Climb, But McDonald's Eats Into Rally

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09/12/2017 | 04:16 pm

By Mark DeCambre and Barbara Kollmeyer, MarketWatch

Wall Street awaits Apple Inc.'s iPhone product update

U.S. stock indexes on Tuesday traded modestly higher, but gains were capped by declines in technology, health-care and consumer-staples stocks after a brisk, broad-market run-up in the previous session.

The S&P 500 set a fresh all-time, intraday high, marked by a resurgence in buying on Wall Street, though some of that enthusiasm has cooled in afternoon trade. Investors also awaited a key product debut from Apple.

The Dow Jones Industrial Average rose 56 points, or 0.3%, 22,13, but its gains were being limited by a sharp decline in shares of McDonald's Corp. (>> McDonald's Corporation), which was seeing its stock on track for the worst one-day decline since July 26, 2016, according to FactSet data.

The S&P 500 added 5 points, or 0.2%, to 2,493, notching a new intraday day high previously at 2,490.87, led by a second straight day of gains for financials as the yield of the 10-year Treasury note climbed to 2.16%, compared with around 2.05% late last week, supporting the business models of lenders like Goldman Sachs Group Inc. (>> Goldman Sachs Group) and J.P. Morgan Chase & Co. (>> JP Morgan Chase & Company). Meanwhile, health care, real estate, and utilities were the worst performing sectors, trading in negative territory.

The Nasdaq Composite Index was slightly higher, up 0.1%, at 6,437, hovering around a closing record for the technology-laden index.

Robert Pavlik, chief market strategist at Boston Private Wealth, said recent moves are a combination of the unwind of the so-called fear trade, which has helped to lift rates and the banking sector--typically a bellwether for the rest of the economy--in tandem. He said the market has broadly offered signs that it is growing at a healthy, if not robust, pace, which should be taken as a bullish sign.

"Today's movement is a [further] unwinding of the fear trade," Pavlik said. He has maintained a fairly rosy outlook for the S&P 500 with a year-end forecast at 2,535, less than 2% from present levels.

"There will be some more volatility before the month is over, but I am not letting that bother me," Pavlik said. "I am seeing a [corporate] earnings environment that is supportive at these levels, but we will likely get these periods where people are worried abut valuations," he said.

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Tuesday's moves come after the S&P 500 and the Dow industrials logged their biggest one-day percentage gains in months. The S&P 500 finished up 1.1% to reach an all-time high of 2,488.11, while the Dow retook a key level, closing up 1.2% at 22,058.37.

At the same time, the Nasdaq climbed 1.1%. Stocks rallied after Hurricane Irma caused less damage than expected, and as tensions around North Korea eased.

Apple Inc. (>> Apple), which is holding an event later Tuesday, rose by 0.3%, after Monday's was down 0.4% early Tuesday. Investors expect the iPhone maker to reveal its 10th anniversary mobile phone, which reportedly has a price tag of around $1,000 . The Cupertino, Calif.-based company's keynote presentation is slated to commence at 1 p.m. Eastern.


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Economic reports: On the economic front, a report on Job openings in the U.S. set a record in July, climbing steadily despite the lowest unemployment rate in years. The Labor Department reported on Tuesday that openings edged up to 6.17 million in July from 6.12 million in June. It is the first time openings have topped 6 million for two straight months since the government began keeping track in 2000.

Data earlier showed sentiment among small-business owners ticked up in August .

Moving stocks: Shares of Teva Pharmaceuticals Industries Ltd.(>> Teva Pharmaceutical Industries Ltd (ADR)) rose nearly 11% after Israeli-based pharmaceutical group said late Monday it will sell its Pargard IUD product to Cooper Cos.(>> Cooper Companies Inc) for $1.1 billion in cash. Cooper shares were off 0.3%.

Equifax Inc.(>> Equifax Inc.) shares rose 0.8%. Standard & Poor's announced late Monday a downgrade of its outlook on the credit-reporting agency to negative from stable in the wake of a recent breach that put the data of 143 million Americans at risk. Equifax shares fell 8.2% on Monday.

Other markets:Asian markets saw tepid gains, outside of a 1.2% rally for the Nikkei which hit its best intraday level in a month as the yen continued to fall against the dollar. The dollar index , meanwhile, was modestly higher, marked by that stronger dollar/yen cross.

The British pound hit the highest level this year after U.K. inflation rose by more than expected.

The Stoxx Europe 600 index put on about 0.5%. Oil prices drifted lower, and gold prices also fell modestly.

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