BRIEF-HNA Group reports 25 pct stake in Park Hotels & Resorts
* HNA Group Co Ltd reports 25 percent stake in Park Hotels & Resorts Inc as of March 15, 2017 - SEC filing Source: (http://bit.ly/2oevTFJ) Further company coverage:
* Dow up 0.2 pct, S&P 500 off 0.04 pct, Nasdaq off 0.2 pct
* After Tuesday's record close, Dow hits an intraday lifetime high
* Private-sector employers add 198,000 jobs in February
* Caution sets in with VIX up 2 pct
By Angela Moon
NEW YORK, March 6 The Dow set another intraday record high on Wednesday on signs of improvement in the U.S. labor market, but trimmed its gains at midday as the broader market fell on investors' caution that the rally may soon run its course.
The stock market's rally this year has been fueled by signs of a strengthening U.S. economy, continued support from the Federal Reserve and fairly attractive equity valuations compared with other assets.
"There is still a lot more cash to be put into equities," said JJ Kinahan, chief derivatives strategist at TD Ameritrade, in Chicago.
"We are seeing investors moving out of the bond market, but their money is not in the stock market yet. They are still not full believers (of equities) but they are having cash in hand because the rally seems to be continuing, and the valuations are still attractive."
The S&P 500 index is trading at 13.6 times estimated 12-month earnings, compared with around 14.9 times in October 2007 when the index hit its intraday high, according to Thomson Reuters data. This suggests that stocks are still about 9 percent cheaper than they were at the 2007 peak.
Relative to junk bonds, the earnings yield on the S&P 500 - the inverse of the P/E ratio and used for valuation comparisons with bonds - is around 7.5 percent - above the yield to maturity on junk bonds, which is around 6.5 percent, data showed, indicating that stocks have a better value than the riskiest corporate bonds.
The CBOE Volatility Index, known as the VIX, Wall Street's favorite barometer of fear, which usually moves inversely to the S&P 500, rose 2 percent as investors snapped up protection on concerns that the rally may run out of steam.
"The fact that 20 percent of the S&P 500 companies are trading at 52-week highs is scaring people, and we are definitely noticing more call buying on the VIX this morning," Kinahan said.
The S&P has gained 8 percent so far this year and is less than 2 percent below its record close. The larger S&P 1500 has already reached record highs, thanks to help from smaller-cap companies.
The Russell 3000 Index, which measures the performance of the 3,000 largest U.S. companies, has also hit a record high.
The Dow Jones industrial average rose 23.38 points, or 0.16 percent, to 14,277.15. The Standard & Poor's 500 Index dipped just 0.69 of a point, or 0.04 percent, to 1,539.10. The Nasdaq Composite Index slipped 5.67 points, or 0.18 percent, to 3,218.46.
Energy companies' shares weighed on the market, with Exxon Mobil down 0.4 percent at $89.23.
The telecom sector also took a toll, with AT&T shares down 0.5 percent at $36.42.
The slowly healing labor market has been one of the weaker spots of the recovery, but data on Wednesday showed private- sector hiring was surprisingly strong in February as companies added 198,000 employees.
It was an early look at the labor market two days ahead of the U.S. government's closely watched non-farm payrolls report on Friday, which is expected to show the economy created 160,000 jobs last month while the unemployment rate held at 7.9 percent.
On Tuesday, the Dow ended at 14,253.77, breaking through October 2007's record close of 14,164.53. For the year, the Dow is up about 9 percent. Shortly after trading began on Wednesday, the Dow punched through the previous session's intraday record, trading as high as 14,320.65.
The Nasdaq fared worse than the other two indexes on Wednesday, weighed down by Microsoft after the European Union fined the company 561 million euros ($731 million) for failing to offer users a choice of web browser. Microsoft was down 1.3 percent at $27.97.
Financial shares gained, with the KBW Bank Index up 0.6 percent. Bank of America climbed 2.1 percent to $11.79.
Staples shares tumbled 6.8 percent to $12.38 after the largest U.S. office supply chain reported lower-than-expected quarterly revenue and forecast weak earnings for the full year.
* HNA Group Co Ltd reports 25 percent stake in Hilton Worldwide Holdings Inc as of March 15 - SEC filing