BLBG: U.S. Stocks Little Changed Before Confidence Data
U.S. stocks were little changed, after a rally that drove the Standard & Poor’s 500 Index to the highest level since 2008, as investors awaited data that may show consumer confidence held near a one-year high.
The S&P 500 rose 0.1 percent to 1,417.20 at 9:30 a.m. New York time. The benchmark measure for American equities had gained 1.7 percent over the previous two days.
Equity futures swung between gains and losses before data that may show consumer confidence in March fell as gas prices climbed. Home prices in 20 U.S. cities dropped at a slower pace in January, pointing to stabilization in the real estate market, a report showed.
The S&P 500 yesterday erased last week’s decline after Federal Reserve Chairman Ben S. Bernanke said that accommodative monetary policy is still needed to spur jobs. The index rose 3.7 percent in March through yesterday, poised for a fourth straight monthly gain, the longest winning streak since 2009. It trades for 14.6 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4.
Investors chasing gains in stocks may help drive the S&P 500 to 1,440 in coming weeks while leaving the market vulnerable to losses once the so-called window dressing is over, UBS AG said.
The S&P 500 has climbed 13 percent since the end of last year, poised for the best first quarter since 1998, amid better- than-forecast earnings and economic data. The S&P 500 would need to rise 1.7 percent to reach 1,440 from yesterday’s closing level of 1,416.51.
UBS Target Range
Peter Lee, the New York-based chief technical analyst for UBS, said fund managers’ purchases of the best-performing stocks at the end of the quarter are likely to push the S&P 500 toward his 2012 target range of 1,440 to 1,450 sooner than the second half of the year, as he had anticipated. A failure of the benchmark index to hold gains above these levels may trigger a pullback of 5 percent to 10 percent, he said.
“When the quarter has been extremely strong, these institutional investors are pressured or motivated to dress up their portfolios to show clients that they actively participated in the marketplace during the quarter,” Lee wrote in a note yesterday. “The focus on momentum stocks and sectors leaves the overall market vulnerable for a correction.”
To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net
