Dow hits record for fourth day
NEW YORK (Reuters) - U.S. stocks finished nearly flat on Tuesday, although the Dow eked out another record closing high as utilities' shares fell while 10-year bond yields hit their highest level in a month.
Six of the 10 primary S&P 500 sector indexes ended the session lower. The decline was led by a 0.3 percent drop in the S&P utilities index .SPLRCU. Utility stocks' high dividends tend to lose some of their appeal when bond yields jump.
It was the Dow's fourth straight record closing high. The S&P 500, though, broke its four-day string of record high finishes.
The benchmark S&P 500 moved within less than a 7-point range, continuing its recent tight trading pattern.
"Obviously, a lot of people have been concerned the S&P 500 has hit so many price targets that it does need to consolidate a bit, so that's why the activity is a little quieter than normal. People don't have a reason to sell, but they also don't have a reason to go out and buy with any type of enthusiasm, so you kind of end up in this holding pattern," said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Shares of eBay (EBAY.O) fell 2.7 percent to end at $48.25, ranking as the second-biggest drag on the S&P 500.
The stock's slide came after news late Monday that David Marcus, who has led eBay's fast-growing payments unit PayPal for the past two years, will step down this month to run Facebook's (FB.O) messaging products. Facebook Inc (FB.O) shares rose 4.6 percent to $65.77.
The Dow Jones industrial average .DJI rose 2.82 points or 0.02 percent, to 16,945.92, a record closing high.
Strategists at Bank of America Merrill Lynch slightly reduced their recommended equity allocation for clients with a moderate risk tolerance, reflecting a bit more cautiousness, but still remained positive on stocks, according to a note. The firm's Resource Investment Committee said it cut its equity allocation for moderate-risk clients by 2 percentage points to 66 percent.
Volume was once again below average. With just 5.2 billion shares changing hands on U.S. exchanges, Tuesday's volume was below the 5.76 billion average for the last month, according to data from BATS Global Markets.
The CBOE Volatility Index .VIX ended down 1.4 percent at 10.99. Further evidence of the low volatility and the slow grind in the market: The 14-day Average True Range on the S&P 500 hit 10.09, the lowest since February 2013.
Besides Facebook, other momentum stocks ranked among the day's biggest outperformers, including Netflix Inc (NFLX.O), up 1.2 percent at $428.29.
Achillion Pharmaceuticals Inc (ACHN.O) was among the Nasdaq's most-active names, surging 83.3 percent to $7.79. The company said on Tuesday that the U.S. Food and Drug Administration let it resume the development of one of its hepatitis C drugs.
JMP Securities upgraded the stock to "market outperform" from "market perform."
The biotech sector got a lift from Receptos Inc (RCPT.O), which shot up 36.8 percent to $39.94 after the company's experimental multiple sclerosis drug met its main goal in a mid-stage trial.