For the third consecutive day, the S&P edged up a few more points and since Thursday was a new all-time high, both Friday and today became newer all-time highs.  It was what investors regarded as "tepid economic data" that left the market reassured that no Fed action on interest rates was imminent that pushed the indices higher, if only modestly so. The Dow was up 26, the S&P 6. But the data really wasn't all that tepid.  Homebuilder sentiment reportedly fell in May even though most builders view the market favorably.  The dollar also strengthened which lately has been viewed as bad news but today the market saw it as a good news as a strong dollar can now be a hedge against all the turmoil in the Middle East.  And even if Wall Street does see "tepid data" as good news, this afternoon the Fed issued a new report with a detailed technical analysis as to why the economy is actually doing a good deal better than has been suggested.  But the main mover today was Apple which gained over 1% after Carl Icahn opined that the company's stock was likely worth at least twice as much as it is currently trading.  So all this qualified as "tepid data" eh?  We should have a lot more tepid days like today.  However, all of the above doesn't really amount to much since it was all on quite light volume - only 5.3 billion shares traded.


Markets | Mon May 18, 2015 6:45pm EDT

Dow, S&P close at record highs as rate-hike angst abates

BY NOEL RANDEWICH

DJ:    18,298.88  +26.32      NAS:      5,078.44  +30.15      S&P:      2,129.20  +6.47

(Reuters) The Dow Jones industrial average and S&P 500 ended at record highs on Monday, helped by a rally in Apple as well as tepid economic data suggesting the Federal Reserve may wait to raise interest rates.

The S&P 500 .SPX racked up its third straight all-time high close, gaining 6.47 points, or 0.3 percent, to end at 2,129.2 points. The Dow .DJI rose 26.32 points, or 0.14 percent, to end at 18,298.88, beating its previous record close of 18,288.63 from March 2.  The Nasdaq Composite .IXIC added 30.15 points, or 0.6 percent, to end at 5,078.44

U.S. homebuilder sentiment fell in May although most builders view market conditions as favorable, the National Association of Home Builders said on Monday.

Slowing economic expansion in recent months, stemming partly from a stronger dollar and sluggish wage growth, has led many investors to push back expectations about when the Fed will begin raising interest rates for the first time since 2006.

"It's becoming more of the collective thought that the Fed can wait, because you really don't see any blistering growth," said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia.

Apple's (AAPL.O) shares rose 1.10 percent to $130.19 after Carl Icahn, one of the iPhone maker's top 10 shareholders, said the stock was "still dramatically undervalued" and that it should be trading at $240.

Apple's rise was the biggest factor for the rise in the three major indexes.

Seven of the 10 major S&P 500 sectors were higher, with the financial index's .SPSY 0.56 percent gain leading the way.

Sentiment got a boost from talk of mergers and acquisitions.

Altera (ALTR.O) rose 5.65 percent to $46.93 after the New York Post reported the company had resumed talks with Intel (INTC.O) on a possible deal. Intel (INTC.O) rose 1.24 percent.

Endo International (ENDP.O) fell 5.37 percent to $80.77 after the generic drugmaker said it would buy privately held Par Pharmaceutical from TPG Capital in a $8.05 billion deal.

Alibaba (BABA.N) fell 1.53 percent after a group of luxury goods makers sued the company on Friday, contending that the Chinese e-commerce giant knowingly made it possible for counterfeiters to sell their products throughout the world.

With Monday's advances, the Dow is up 2.7 percent year to date, the S&P 500 is 3.4 percent higher and the Nasdaq is 7.2 percent stronger.

The S&P now trades at 17 times expected earnings, expensive compared to its 10-year median of 15.

Relatively light trading volume suggests recent gains may not be resilient, especially as the market approaches summer months when many on Wall Street takes time off, said Brunner.

About 5.3 billion shares changed hands on U.S. exchanges, below the 6.4 billion average this month, according to BATS Global Markets.

During the session, advancing issues outnumbered declining ones on the NYSE by 1,577 to 1,428, for a 1.10-to-1 ratio on the upside; on the Nasdaq, 1,719 issues rose and 1,014 fell for a 1.70-to-1 ratio favoring advancers.

The S&P 500 posted 34 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 111 new highs and 39 new lows.

Blogger’s Note:  also as the dollar strengthened today, the market saw that as a good thing for a change since it now provides a hedge against the turmoil in the Middle East.  The Fed also issued a paper this afternoon with a rather detailed analysis showing the economy is doing much better than most of the recent reports have suggested.