U.S. stocks pushed against resistance levels Tuesday as blue chips, led by the financial sector, closed at levels not seen in more than five years.
The Dow Jones Industrial Average rose 47.46 points, or 0.3%, to close at 14,018.70, with 23 of 30 components finishing in positive territory. Tuesday’s close is the best since Oct. 12, 2007, and 1% off its record close of 14,164.53, set on Oct. 9, 2007. The index hit an intraday high of 14,038.97 on Tuesday.
Financial stocks boosted blue chips with Bank of America Corp. leading the way with a 3.3% gain. Shares of J.P. Morgan Chase & Co. rose 1%, Travelers Cos. advanced 0.9%, and American Express Co. closed 0.4% higher.
Coca-Cola Co. was the worst performer on the Dow industrials, declining 2.7%, after the beverage giant’s quarterly revenue growth came in below analyst estimates.
The S&P 500 index advanced 2.42 points, or 0.2%, to 1,519.43, with technology the biggest decliner and financials the top gainer among the 10 major industry groups.
The Nasdaq Composite Index , after a brief swing into positive territory, closed down 5.51 points, or 0.2%, at 3,186.49.
Apple Inc. shares ended near their lows of the session, down 2.5% at $467.90. The iPhone maker presented at a Goldman Sachs investment conference in San Francisco.
Apple CEO Tim Cook told investors at the conference that the company did not plan to wage a proxy battle against hedge-fund manager David Einhorn over a proposal to issue preferred stock.
Also in the tech sector, shares of Facebook Inc. fell 3.2%.
The stock market is undergoing an epic struggle right now, having been in a secular bear market for the past 13 years, said Marty Leclerc, principal at Barrack Yard Advisors. With the stock market at multiyear highs, and multiyear resistance levels, we would need another 30% rally over the next year to break out of the bear market, he said.
“We do think it’s a dangerous tipping point,” Leclerc said. “Either the market will go up 30% in the next year or we’ll have a 20% to 25% decline from these levels.”
Advancers outnumbered decliners about 2 to 1 on the NYSE, and 14 to 9 on the Nasdaq. Composite volume was 3.31 billion shares on the NYSE and 1.77 billion for Nasdaq-listed stocks. Volume was well above that of Friday and Monday, when trading levels were their lightest of the year to date.
It was a busy day for Fed officials. Federal Reserve voting member Esther George, the lone “no” vote at the central bank’s meeting last month, said the U.S. economy is being put at risk when the Fed begins to sell the very securities it is buying.
Also, Atlanta Fed’s Dennis Lockhart said in Madrid that 2013 will not be a breakout year for the U.S. economy.
After the market close on Tuesday evening, President Barack Obama will deliver the State of the Union address. “The markets want to see if there is anything new for the direction of the country and the economy,” said Adam Sarhan, chief executive of New York-based Sarhan Capital.
“The pullbacks we’ve seen so far have been very, very mild and that in and of itself is healthy because it shows that sellers are nowhere to be seen. And it shows buyers are still clearly in control of this market,” Sarhan said.
On the corporate front, shares of Michael Kors Holdings Ltd. jumped nearly 9% as the company reported a surge in fiscal third-quarter earnings helped by sharply higher same-store sales.
Marketwatch
