U.S. stocks fall from record level as manufacturing index slips

American Greeting

American Greetings Corp., the biggest publicly traded greeting-card maker, gained 12 percent to $18.09 after it agreed to be taken private by a group led by Chief Executive Officer Zev Weiss for about $524 million. The group, including Chairman Morry Weiss and Chief Operating Officer Jeffrey Weiss, offered $18.20 a share in cash, 27 percent more than the close of the Class A stock on Sept. 25, the day before the Weiss family first proposed to acquire the company.

Ruby Tuesday Inc. climbed 5.7 percent to $7.79 after Barron’s reported the casual dining chain may rise to $13 a share. Barron’s cited estimates by Cove Street Capital analysts, noting the restaurant chain has cut costs and focused on its core brand with “affordable” menus that could boost same-store sales.

The four-year bull market has sent the S&P 500 up more than 131 percent since it reached a 12-year low of 676.53 in March 2009. The rally is extending beyond the average length of bull markets, according to Birinyi Associates Inc. data that show cycles since 1962 have an average duration of four years. Of nine advances, four have lasted longer than the mean and the market rose for about six years during those periods.

Price Estimates

The S&P 500 is trading closer to analyst price estimates than any time in at least seven years. Shares in the index are 5 percent away from analysts’ mean forecasts, according to data compiled by Bloomberg starting in 2006. That’s the smallest difference ever for the median stock and compares with the historical average of 14 percent.

Bulls say the narrowing spread shows securities firms were caught off guard by the rally and that equities will climb as they boost predictions. Bears say the slowness of analysts to respond means stocks have gotten so far ahead of themselves that even market optimists are uncomfortable with the increase, which has added more than $10 trillion to values since 2009.

“The market has moved so fast, it hasn’t given the analysts time to re-evaluate things,” Malcolm Polley, who manages $1.1 billion as chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said in a March 26 phone interview. “As we just finished earnings season and we’re winding down the first quarter, analysts will begin the process of reassessing. My sense is we’re looking for better economic and corporate things than we’re seeing today.”

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