U.S. Stocks Fluctuate as Consumer Shares Gain Offsets Transports

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(Mar 24): U.S. stocks fluctuated, after the Standard & Poor’s 500 Index posted its biggest weekly rally in six, as gains in consumer shares offset a drop in transportation companies.

Consumer-discretionary companies in the benchmark gauge reached a record as Tiffany & Co. rebounded after a selloff Friday, and Darden Restaurants Inc. hit an all-time high. Railroads led a drop in the Dow Jones Transportation Average after Kansas City Southern cut its outlook. The Nasdaq Biotechnology Index fell 1.7 percent after reaching an all-time high Friday.

The S&P 500 rose 0.1 percent to 2,110.31 at 12:00 p.m. in New York. The Dow Jones Industrial Average added 42.96 points, or 0.2 percent, to 18,170.61. The Nasdaq Composite slipped 0.1 percent. The Russell 2000 Index was little changed after reaching a record high on Friday.

“I don’t see any reason to think we need to take another leg up to start the week today,” Michael James, a Los Angeles- based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “The market is going to remain in a trading range, and we’re in the upper band right now.”

The Nasdaq Composite jumped on Friday to a 15-year high, almost erasing its losses since the end of the dot-com bubble. The S&P 500 rose 2.7 percent last week, with the dollar weakening, as concern eased about an interest-rate increase. The S&P 500 and Dow are less than 1 percent from records they last reached on March 2.

Nasdaq’s Run

The Nasdaq gauge has rebounded 3.6 percent since March 11. It crossed 5,000 earlier this month before losing 3.2 percent in nine days. The index was bolstered by a rally in health-care stocks. The Nasdaq Biotechnology Index jumped 6.2 percent for its biggest weekly gain since October.

The S&P 500 has gone 23 consecutive sessions without back- to-back advances, the longest since a 23-day stretch in June 2010. In 2014, gains came much easier as the measure never fell four days in a row.

The Nasdaq Composite approached a record the same week that its biggest member, Apple Inc., entered a much older gauge, the Dow Jones Industrial Average. At 44, the Nasdaq has been around less than half as long as the Dow, and has spent about one-third of its life trying to claw back from the dot-com crash.

Fed Speakers

Fed Vice Chairman Stanley Fischer speaks at the Economic Club of New York on Monday, while San Francisco Fed President John Williams will deliver a speech via videoconference to the Australian Business Economists. Cleveland Fed President Loretta Mester said in in a Bloomberg Television interview in Paris Monday that it is appropriate to raise rates this year.

“Last week when Yellen spoke, that was seen favorably by the market,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview. “The speakers today should reinforce what she said last week and stick to the status quo.”

Sales of previously owned homes fell short of a 5 million annual rate in February for a second month, showing an industry struggling to gain traction amid rising prices and a lack of inventory.

Closings rose 1.2 percent to a 4.88 million annual rate, the National Association of Realtors reported Monday in Washington. The median value of a house climbed 7.5 percent from the same month last year.

Price Swings

The Chicago Board Options Exchange Volatility Index increased 2.5 percent to 13.35. The gauge, know as the VIX, fell 19 percent last week, its biggest five-day decline since January.

Eight of the S&P 500’s 10 main groups climbed, led by consumer-staples companies’ 0.5 percent gain. Mondelez rose 1.9 percent, while tobacco company Reynolds American Inc. and Archer-Daniels-Midland Co. added at least 1 percent.

Tenet Healthcare Corp. jumped 5.2 percent after saying it will combine its outpatient surgery centers with closely held United Surgical Partners International Inc. in a joint venture, expanding its bet on facilities that are becoming more popular with patients.

Homebuilders in the S&P 500 added 0.4 percent even amid the weaker-than-expected existing home sales data as Ryland Group Inc. and Meritage Homes Corp. rose more than 1.2 percent.

Kansas City Southern slipped 8.1 percent after announcing updated 2015 guidance, pushing the Dow Jones Transportation Index down 1.5 percent. The company now sees low single-digit revenue growth for the year, reducing a January outlook forecasting a mid-single-digit increase.

Vertex Pharmaceuticals Inc. dropped 3.1 percent after the company said its cystic fibrosis drug Kalydeco combined with an experimental drug helped patients’ breathing less than analysts forecast. Celgene Corp. and Regeneron Pharmaceuticals Inc. decreased more than 2.8 percent.