“There really is a lot of fear about the threat of higher interest rates,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “It’s not an ‘if’ story. It’s a ‘when’ story.”
The Dow Jones industrial average (^DJI) rose 13.51 points, or less than 0.1 percent, to end at 18,312.39 points. The Standard & Poor’s 500 index (^GSPC) hit an intraday record of 2,133.02 before ending down 1.37 points, or less than 0.1 percent, at 2,127.83, and the Nasdaq composite (^IXIC) dropped 8.41 points, or 0.2 percent, to 5,070.03.
The S&P had closed at record highs Friday and Monday after a stream of weak economic data suggested that Fed would wait to see more strength in theeconomy before raising rates.
The S&P is trading at 17.1 times forward earnings, compared with its 10-year median of 14.7, according to Thomson Reuters StarMine.
“We don’t look at this as an overvalued market at all. We look at levels of cash and investments on corporate balance sheets as extremely strong,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.
“Companies are buying back stock, raising dividends. They’re acting in the best interest of shareholders more and more.”
Oil Drops, Dollar Rises
Seven of the 10 major S&P 500 sectors were down, with the energy index off 1.23 percent. Oil prices fell as the dollar strengthened and on evidence of ample supplies of Middle Eastern oil despite wars in northern Iraq, Syria and Yemen.
Walmart’s shares fell 4.37 percent at $76.43 and were the biggest drag on the Dow and the S&P 500 after the company reported lower-than-expected U.S. same-store sales growth.
Take-Two Interactive jumped 18.26 percent after its profit handily beat market estimates, helped by strong digital sales of “Grand Theft Auto V” and “NBA 2K15” games.
Declining issues outnumbered advancing ones on the NYSE by 1,829 to 1,225, for a 1.49-to-1 ratio on the downside; on the Nasdaq, 1,575 issues fell and 1,194 advanced for a 1.32-to-1 ratio favoring decliners.
The S&P 500 posted 44 new 52-week highs and 2 new lows; the Nasdaq composite recorded 113 new highs and 51 new lows.
About 5.9 billion shares changed hands on U.S. exchanges, below the 6.3 billion average this month, according to BATS Global Markets.
–With additional reporting by Sweta Singh and Tanya Agrawal.
What to watch Wednesday:
- The Federal Reserve releases minutes from its April interest-rate meeting at 2 p.m. Eastern time.
These selected companies are scheduled to release quarterly financial results:
- American Eagle Outfitters (AEO)
- Eaton Vance (EV)
- Hormel Foods (HRL)
- L Brands (LB)
- Lowe’s Cos. (LOW)
- NetApp (NTAP)
- Salesforce.com (CRM)
- Staples (SPLS)
- Target (TGT)
- Williams-Sonoma (WSM)