September 24, 2020

Dow Ekes Out 8th Consecutive Gain in Otherwise Flat Trading

The stock market meandered on Tuesday, ending the day with little change, although the Dow Jones industrial average crept up to another nominal high.

The Dow, which has risen for eight consecutive trading sessions, added 2.77 points to close at 14,450.06 after wavering between small gains and losses for most of the day.

The broader Standard Poor’s 500-stock index ended down 3.74 points, or 0.2 percent, at 1,552.48. The Nasdaq composite index dropped 10.55 points, or 0.3 percent, to 3,242.32.

Stocks have surged this year as investors became encouraged by a recovery in the housing market and a pickup in hiring. Strong corporate earnings and continuing economic stimulus from the Federal Reserve are also supporting demand for stocks.

The Dow has gained 10.3 percent in 2013. Last week it surpassed its previous nominal high of 14,164.53. The S. P. 500 has risen 8.9 percent this year and is less than one percentage point from its nominal high close of 1,565.15, set in October 2007.

David Bianco, chief United States equity strategist at Deutsche Bank, said the S. P. 500 index would probably maintain its momentum in the coming weeks and surpass its nominal high. Strong first-quarter corporate earnings reports could also push the market higher.

“I wouldn’t be surprised if the market has a typical 5 percent pullback in the summer,” Mr. Bianco said. “But I think we go higher before that happens.”

The last significant downturn for stocks began before the presidential election in November, when the Dow fell 8 percent from Oct. 5 to Nov. 15 on investors’ concerns that a divided government in Washington might not be able to reach a budget deal to avoid sweeping tax increases and deep spending cuts.

Stocks have not had a correction, typically defined as a decline of 10 to 20 percent, since November 2011.

Peter Cardillo, chief market economist at Rockwell Global Capital, was among those saying investors should expect a pause in the market’s advance.

“Nothing goes up forever,” Mr. Cardillo said. “We will be headed for a correction somewhere along the line.”

Merck was the biggest gainer in the Dow, advancing $1.38, or 3.2 percent, to $45.04 after it said that a data safety monitoring board had recommended that a study of its cholesterol drug Vytorin should continue.

Among the stocks on the move, Yum Brands rose 89 cents, or 1.3 percent, to $68.73 after the company, which owns KFC, Pizza Hut and Taco Bell, announced a smaller-than-expected drop in its sales in China for January and February after a food scare over its chicken suppliers.

Diamond Foods slumped $1.71, or 9.7 percent, to $15.89 after the company reported disappointing second-quarter sales and offered an estimate for the rest of the fiscal year that also fell short of Wall Street estimates.

VeriFone Systems gained $1.22, or 6 percent, to $21.68 after the company, a leading maker of terminals for electronic payments, said late Monday that its chief executive would step down after recent stumbles cut the company’s stock price nearly in half.

Costco Wholesale rose $1.31, or 1.3 percent, to $103.75 after reporting that its fiscal second-quarter net income climbed 39 percent. Costco pulled in more money from membership fees, its sales improved and it recorded a large tax benefit. Even without the tax benefit, the results were better than analysts had expected.

Cabela’s, an outdoor retailer, gained $6.75, or 12.5 percent, to $60.65 after it said that it expected its first-quarter profit to exceed market expectations.

In the bond market, interest rates declined for the first time in seven trading sessions. The price of the Treasury’s 10-year note rose 12/32, to 99 27/32, while its yield dropped to 2.02 percent from 2.06 percent late on Monday.

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