* Apple reportedly close to deal for Beats Electronics
* IBM helps Dow; momentum shares like Gilead, Netflix rise
* Dow up 0.2 pct; S&P 500 up 0.2 pct; Nasdaq up 0.5 pct
(Updates to close)
By Caroline Valetkevitch
NEW YORK, May 9 The Dow ended at a record high
on Friday, boosted by IBM, while a rebound in high-growth
momentum names helped the broader market.
Consumer discretionary shares also lifted the market, with
the stock of Gap Inc up 3.3 percent at $40.52 after the
apparel retailer reported upbeat April sales and gave a profit
forecast that surpassed Wall Street's expectations. The S&P
consumer discretionary index was up 0.6 percent.
Apple Inc was the biggest drag on both the
benchmark S&P 500 index and the Nasdaq 100 on news that
it is close to paying a record $3.2 billion for Beats
Electronics, an expensive foray into music streaming and
headphone gear, two people with knowledge of the matter said.
Some analysts questioned whether Beats, valued at $1 billion
during its last funding round in September, was worth that
price. Apple shares fell 0.4 percent to $585.54.
Momentum names advanced, with shares of Gilead Sciences Inc
up 1.3 percent at $79.76. Netflix Inc shares
rose 2.1 percent to $328.55 after the company increased the
price of its most popular video streaming plan by $1 a month.
The gains came after a volatile week for those shares. The
S&P 500 has alternated between gains and losses each day this
week, and the Nasdaq has dropped for three straight sessions -
its longest losing streak since early April - as
Internet-related stocks came under pressure.
Trading was mostly lackluster, with about 5.7 billion shares
changing hands on the U.S. exchanges, below the 6.2 billion
month-to-date average, according to data from BATS Global
"The volatility and the decline in a lot of growth stuff is
wearing people out," said Michael James, managing director of
equity trading at Wedbush Securities in Los Angeles. "There's a
lot of trader fatigue."
The Dow Jones industrial average rose 32.37 points or
0.2 percent, to 16,583.34, the S&P 500 gained 2.85 points
or 0.15 percent, to 1,878.48 and the Nasdaq Composite
added 20.374 points or 0.5 percent, to 4,071.869.
Shares of International Business Machines Corp rose
0.6 percent to $190.08 and helped lift the Dow to a record
For the week, the Dow rose 0.4 percent, while the S&P 500
dipped 0.1 percent and the Nasdaq fell 1.3 percent. This marked
the Nasdaq's biggest weekly percentage decline in a month.
The Russell 2000 gained 0.9 percent. Early in the
session, it flirted with correction territory, defined as a 10
percent drop from a recent peak. At its session low, the Russell
touched 1,091.50, nearly 10 percent below its all-time closing
high of 1,208.65 reached on March 4.
Healthcare stocks rose, with shares of Merck up 0.7
percent at $55.21 a day after U.S. health regulators approved a
blood-clot prevention drug developed by Merck for use by
patients who have had a heart attack or who suffer from
blockages in the arteries of the legs. The S&P healthcare index
was up 0.6 percent.
Among the day's big decliners, Rocket Fuel Inc
shares tumbled 21.5 percent to $21.83 after the technology
provider for Web-based video advertising forecast
current-quarter revenue far below expectations, prompting
downgrades from Goldman Sachs and BMO Capital.
Advancers outnumbered decliners on the New York Stock
Exchange by a ratio of about 17 to 13, while on the Nasdaq,
nearly 17 stocks rose for every nine that fell.
(Editing by Bernadette Baum, Nick Zieminski and Jan Paschal)