U.S. stocks swung between gains and losses, while the Dow Jones Industrial Average rose above 16,000 for the first time, after a Federal Reserve official said policy will remain accommodative as the economy improves.
Boeing Co. rose 1.8% after securing record plane orders on the first day of the Dubai Air Show. Tyson Foods Inc., the largest U.S. meat processor, advanced 1.5% after reporting revenue above analysts’ estimates on a gain in prices and sales volumes for beef and chicken. Microsoft Corp. fell 1.4% after Bank of America Corp. cut its rating to underperform from neutral.
The S&P 500 slipped 0.1% to 1,796.19 as of 2:51 p.m. in New York. Earlier, it rose 0.2%. The Dow average added 39.79 points, or 0.3%, to 16,001.49. Trading in S&P 500 stocks was 7.5% below the 30-day average during this time of the day.
“As we keep going and making new highs, we get into new territory and the air keeps getting thinner and thinner up here,” Tim Hartzell, who helps manage about $425 million as chief investment officer at Sequent Asset Management, said via phone from Houston. “Everybody is watching Yellen and feel comfortable that she’ll continue QE, maybe even put more into the system.”
New York Fed Bank President William C. Dudley said he’s “getting more hopeful” the U.S. economy is gaining strength as the drag from fiscal policy wanes. The central bank’s monetary policy is likely to be accommodative for a long time, he said today. U.S. stocks have risen for the past six weeks, reaching all-time highs as Janet Yellen signaled she will continue stimulus efforts as the central bank’s chairman.
The policy-setting Federal Open Market Committee is buying $85 billion of bonds every month and won’t taper its purchases until its March 18-19 meeting, according to the median estimate of 32 economists surveyed by Bloomberg News Nov. 8.
China’s leaders vowed to allow more private investment in state-controlled industries and expand farmers’ land rights as part of the ruling Communist Party’s biggest package of economic reforms since the 1990s. Chinese stocks rose, with the benchmark index for mainland companies in Hong Kong surging the most since December 2011.
“To the extent that these reforms might lead to some higher estimates of growth in the coming years, that would be welcomed by investors,” John Carey, a portfolio manager at Pioneer Investment Management, which oversees $20 billion.
The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 3.6% to 12.63. It has fallen 30% this year.
Six out of 10 main industries in the S&P 500 fell, with raw-materials producers retreating 0.3% to pace declines. Financials companies rallied 0.6% as a group for the biggest gain.
Boeing added 1.8% to $138.54. The company took an early lead over rival Airbus SAS in the biennial Dubai expo, signing up Etihad Airways PJSC for its new 777X wide-body planes as well as for more 787 Dreamliners.
Tyson climbed 1.5% to $29.21. The company said fiscal fourth-quarter sales rose 7% to $8.89 billion, beating the $8.87 billion average of 12 analysts’ estimates compiled by Bloomberg.
Consol Energy Inc. fell 3.7% to $34.64 for the second-biggest decline in the S&P 500. The coal producer was cut to neutral from buy at Citigroup Inc. by analyst Brian Yu, who said in a note that the outlook for metallurgical coal looks worse than base metals. Peabody Energy Corp., the largest U.S. coal producer, lost 3.3% to $19.43.
Microsoft declined 1.4% to $37.34. Bank of America analyst Kash Rangan cut the shares to underperform from neutral, citing the risk that the board will select a chief executive officer that disappoints investors.
Nvidia Corp. dropped 2.1% to $15.83. The shares were cut to underweight, or sell, from equalweight, or hold, at Morgan Stanley.
Cheap is converging with expensive in the American equity market, narrowing options for investors looking for bargains after the broadest rally on record lifted almost 90% of the S&P 500 this year. A measure of the dispersion of price- earnings ratios in the S&P 500 compiled by Goldman Sachs Group Inc. narrowed to 41% in June, the lowest on record, and held around that level since.
Investors this week will scrutinize minutes of the Federal Open Market Committee from its Oct. 29-20 meeting and public remarks by Fed officials. The minutes are set to be released on Nov. 20. Fed Chairman Ben Bernanke is due to speak tomorrow, while Fed Bank of St. Louis President James Bullard will deliver a speech on Nov. 20.
“This week is crucial, there is a lot of Fed speak,” Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion, said by telephone. “Investors want to get a little bit more color and atmospherics from the minutes.”