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S&P 500 briefly crests at highest level ever as stocks drift

By STAN CHOE
AP Business Writer
NEW YORK (AP) — Stocks are drifting on Wall Street Tuesday, and the S&P 500 is once again bouncing against its record closing level, which has been acting as its ceiling in recent days.
The S&P 500 was virtually flat at 3,382.24 in midday trading. Earlier, it briefly rose above its record closing high of 3,386.15, which was set in February before the pandemic pancaked the economy. It’s the fourth time in the last week that’s happened, and each past time, the index faded back below that record level during the afternoon.
This is the first day, though, that the S&P 500 crested above 3,393.52, which had stood since Feb. 19 as the highest level it ever touched within a day’s trading.
The Dow Jones Industrial Average was down 87 points, or 0.3%, at 27,757, as of 11:12 a.m. Eastern time, and the Nasdaq composite was up 0.4%.
Trading has been very quiet in recent days, after a tremendous rally since March wiped out virtually all of the nearly 34% drop the S&P 500 suffered earlier from its all-time high. Tremendous amounts of aid from the Federal Reserve and Congress helped launch the rally, which built higher on signs of budding growth in the economy. More recently, corporate profit reports that weren’t as bad as expected have helped boost stock prices.
Now, analysts say markets are taking a pause with less news flowing in amid a seasonally slow period of trading. Big U.S. companies are mostly finished reporting their earnings for the spring, while investors are waiting to see if Congress and the White House can get past their partisan differences and agree on more aid for the economy.
It’s mostly just retailers left in the S&P 500 to report their second-quarter results, and several continued the strong recent trend of delivering better results than expected.
Advance Auto Parts rose 1.2% after it reported a much bigger jump in earnings for the spring than analysts had forecast. It said enhanced unemployment benefits and other aid for the economy provided earlier by the U.S. government helped its customers afford parts to repair and service their automobiles. It said sales grew at its established stores last quarter by the strongest degree in nearly a decade.
Walmart and Home Depot also reported better results than analysts expected. Walmart benefited from surging sales for its online business, as customers looked to buy necessities without having to go to a store. Home Depot, meanwhile, saw more people picking up do-it-yourself projects as the pandemic kept many working from home.
Their stocks, though, were more muted. Walmart was down 1.5% after waffling between small gains and losses. Home Depot slipped 1.1%.
Home Depot’s report coincided with data from the Commerce Department showing a recovery is continuing for home construction. Builders broke ground on more new homes in July than economists expected, and at a faster pace than June.
It echoes other data that have shown budding improvements across the economy since the spring, as widespread shutdowns have eased. The worry, though, is that conditions could backtrack if coronavirus counts worsen or if Washington can’t broker a deal on more aid for an economy that investors say absolutely needs it. Extra unemployment benefits for workers and other stimulus for the economy have already expired.
Numerous other risks are also hanging over the market. The world’s two largest economies keep ratcheting up their tensions, and China on Tuesday accused Washington of damaging global trade with sanctions that threaten to cripple tech giant Huawei. China added that it will protect Chinese companies, though it gave no indication of possible retaliation.
The yield on the 10-year Treasury dipped to 0.66% from 0.69% late Monday.
In Asia, South Korea’s Kospi led regional losses, slumping 2.5% amid worries over surging coronavirus cases. Hong Kong’s Hang Seng index lost 0.2%, Japan’s Nikkei 225 slipped 0.2% and stocks in Shanghai added 0.4%.
In Europe, Germany’s DAX slipped 0.4%. The French CAC 40 lost 0.7%, and the FTSE 100 in London dipped 0.8%.
Benchmark U.S. crude oil fell 0.7% to $42.25 per barrel. Brent crude, the international standard, slipped 0.4% to $45.18 per barrel.
Gold added 0.4% to $2,005.70 per ounce.