MARKET REPORT

S&P flirts with record for 3rd day

Specialist Paul Cosentino (right) works at his post Wednesday on the floor of the New York Stock Exchange.
Specialist Paul Cosentino (right) works at his post Wednesday on the floor of the New York Stock Exchange.

NEW YORK - For a third straight day, the Standard & Poor’s 500 index traded above its record close Wednesday but fell back to end below it.

An early move higher was led by retailers and home builders, but the gains mostly petered out in the afternoon. By the closing bell, the index was up just a fraction of a point.

The S&P 500 edged up four-hundredths of a point to close at 1,845.16, more than three points short of its record close of 1,848.38, set Jan. 15. The index climbed as high as 1,852.65 during the day.

The Dow Jones industrial average rose 18.75, or 0.1 percent, to 16,198.41. The Nasdaq composite rose 4.48 points, or 0.1 percent, to 4,292.06.

After rebounding from losses early in the year, when investors were concerned about the outlook for growth in emerging markets and the U.S., the stock market now appears to be at a crossroads.

While investors seem comfortable attributing the recent weakness in economic reports to the unusually cold weather, they also appear reluctant to push stocks higher before they see more evidence of growth.

“This is a market that has been trying to decipher how much of the negative news is weather-based, against concerns that we have moved into a soft patch,” said Quincy Krosby, a market strategist at Prudential Financial.

Homebuilder stocks rose sharply after the government reported that U.S. sales of new homes jumped in January at the fastest pace in more than five years. That’s a hopeful sign after a slowdown in the housing market last year caused by higher interest rates. Pulte Group rose 57 cents, or 2.8 percent, to $21.25 and Lennar rose $1.52, or 3.6 percent, to $43.78.

Retailers rose after several encouraging earnings reports.

Lowe’s climbed $2.61, or 5.4 percent, to $50.72. The company’s net income rose 6 percent in the most recent quarter as the home-improvement retailer continued to benefit from a recovery in the housing market. The company also announced a new $5 billion stock repurchase program.

Abercrombie & Fitch jumped $4.05, or 11.3 percent, to $40.04 after posting earnings that exceeded the expectations of Wall Street analysts. The retailer also initiated a$150 million accelerated share buyback program.

“We’ve dialed estimates down in that space, simply because of worries about the effects of the weather,” said Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank. “A lot of people were walking in today expecting some of those retail companies to have much softer results.”

Investors may get a catalyst to push stocks higher today when Janet Yellen, the new head of the Federal Reserve, testifies before the Senate’s Banking Committee. Stocks jumped Feb. 11 when Yellen spoke to Congress and said that she would continue the central bank’s market friendly, low-interest rate policies.

The comments were her first in public since taking over for Ben Bernanke at the Fed. Her appearance in the Senate was delayed because of a winter storm.

Bond prices rose Wednesday, and the yield on the 10-year Treasury note fell to 2.66 percent from 2.70 percent.

Business, Pages 26 on 02/27/2014

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