The S&P 500 closed at an all-time high of 1,808.37 yesterday and has rallied 26% in 2013, on pace for its biggest jump since 1998. Its year-to-date advance is the fourth- biggest among 24 developed markets tracked by Bloomberg, behind Japan’s 50% rally and gains of at least 30% in Ireland and Greece. The index trades for almost 17 times reported earnings, near the highest valuation since 2010.
Microsoft Corp., Procter & Gamble Co. and Coca-Cola Co. lost more than 1.3% to lead a 0.3% decline in the Dow Jones Industrial Average. Ares Capital Corp. dropped 3% after saying it will sell shares to help reduce debt. Newmont Mining Corp. rose 2.5% as gold surged.
Consumer-staple, utility and telephone shares had the biggest declines among the 10 main industries in the S&P 500. They are also three of the five worst performing groups of the year.
“This is typical December action,” Bruce Bittles, chief investment strategist at RW Baird & Co., said by phone from Sarasota, Florida. His firm oversees $100 billion. “It’s caused by tax-related moves by investors. You get a lot of people selling areas of the market that underperformed for tax losses, and they match those with a little bit of selling in some of the winners.”
General Motors Co. lost 1.2%. The Treasury Department sold its shares in the company, freeing the carmaker from U.S. taxpayer ownership almost half a decade after first receiving government aid. GM named Mary Barra to succeed Dan Akerson as chief executive officer, making her the first female CEO in the global automotive industry. Akerson is retiring Jan. 15. Tim Solso was named chairman.
The S&P 500 Financials Index slipped 0.3%. Wall Street faces more intensive government scrutiny of trading after U.S. regulators issued what they billed as a strict Volcker rule today, imposing new curbs designed to prevent financial blowups while leaving many details to be worked out later.
The Fed and Federal Deposit Insurance Corp. voted unanimously to adopt the proprietary trading ban and three other agencies were to complete their approvals by the end of the day. The rule has been contested by JPMorgan Chase & Co., Goldman Sachs Group Inc. and their industry allies for more than three years.
Shares of Starbucks Corp., the world’s largest coffee-shop chain, slid 3% as coffee futures surged and an ITG Investment Research analyst said sales growth in the Americas may be slowing.
McDonald’s Corp. is marketing bonds denominated in euros as U.S. companies raise debt in the currency at the fastest pace since 2008. American companies issued 46 billion euros of bonds in Europe this year compared with 20 billion euros in 2012, according to data compiled by Bloomberg.
10-year Treasury yields fell to 2.80% in a third day of declines.