U.S. stocks were little changed after the Standard & Poor’s 500 Index’s longest winning streak since July, as Apple Inc. (AAPL) tumbled and President Barack Obama postponed a decision on military action against Syria.
Apple lost 4.9 percent after the price of its new lower-cost iPhone disappointed analysts. Marriott International Inc. increased 2.3 percent after a Chinese land developer said he wants to buy hotel-management companies in the U.S. Verizon Communications Inc. dropped 0.1 percent after the company started the largest ever corporate bond sale.
The S&P 500 (SPX) fell 0.1 percent to 1,683.03 at 9:42 a.m. in New York. The Dow Jones Industrial Average rose 35.32 points, or 0.2 percent, to 15,226.38. Trading in S&P 500 stocks was 29 percent higher than the 30-day average at this time of day.
“The downside risk from Syria diminished and that explains the recent rise in risk assets,” Stewart Richardson, who helps oversee about $100 million as chief investment officer at RMG Wealth Management LLP in London, said by telephone. “That was helped by the better-than-expected data in China. Some of the equity markets, especially emerging markets, were probably oversold and enjoyed a bit of a bounce. Some markets are up several days in a row.”
The S&P 500 advanced 3.1 percent so far in September through yesterday as reports showedChina’s economy has strengthened, while concern abated that the U.S. will soon bomb Syria.
Obama said late last night in an address from Washington that he will pursue a proposal byRussia for Syria to surrender its stockpiles of chemical weapons to international authorities. He had said he would ask Congress to authorize the use of military force against President Bashar al-Assad’s regime following a suspected chemical-weapons attack on Aug. 21 that the U.S. says killed more than 1,400 people.
The tensions over Syria have recently overshadowed investor concern that the Federal Reservewill pare back its record stimulus following its Sept. 17-18 meeting. The central bank is watching economic data as it considers reducing the monthly $85 billion in asset buying. The stimulus has helped the S&P 500 rally as much as 153 percent since the beginning of the bull market in March 2009.
Economists estimate the Fed this month will taper its monthly bond buying by $10 billion, to $75 billion, according to the median of 34 responses in a Bloomberg News survey.
The S&P 500 traded yesterday above its 150-day moving average for the 200th straight session. That’s the sixth longest streak since 1980 and the longest since 2004, according to Miller Tabak & Co.’s Jonathan Krinsky.
“We are in the midst of one of the greatest and steady bull markets we have seen in recent history,” the technical analyst wrote in a note today. “Eventually it will end. Until then, however, enjoy the ride.”
The index has rallied 21 percent through yesterday from the last time it traded below the trend line on Nov. 20, 2012.
In five prior instances, after crossing the 200-day mark, further gains were “rather limited” during four runs, while in the 1995-1996 streak, the S&P 500 rose another 15 percent, Krinsky wrote.
Apple dropped 4.9 percent to $470.66, the biggest slide since May, after introducing two models of its iPhone yesterday. The world’s largest technology company was cut to neutral from buy at Bank of America Corp., which said that the lower-cost smartphone cost too much to increase sales in emerging markets.
Credit Suisse Group AG lowered the Cupertino, California-based company to neutral from outperform, UBS AG cut its rating on the stock to neutral from buy and Piper Jaffray Cos. lowered its 12-month price target on Apple’s shares to $640 from $655.
Marriott International added 2.3 percent to $42.57. Wang Jianlin, China’s richest man and the owner of the country’s biggest commercial land developer, said he has hired two investment banks to buy hotel-management companies.
Verizon fell 0.1 percent to $46.44. The second-biggest U.S. telephone carrier began selling today $45 billion to $49 billion of bonds, more than twice the size of Apple’s unprecedented $17 billion issue in April, according to data compiled by Bloomberg. The company is raising money for its $130 billion acquisition of Vodafone Group Plc’s stake in Verizon Wireless.
Source: Bloomberg
