Wall Street extends rally, S&P aims for another record

NDTV Profit Desk

07 May 2013, 09:59 PM IST

Wall Street rose on Tuesday, with the S&P 500 extending its three-day rally to an intraday high, although profit-taking in technology shares capped gains.

The tech sector, which had been among the gainers for the past couple of days, turned negative as a decline in Apple weighed heavily on the Nasdaq composite index.

Shares in First Solar and video subscription company Netflix were also down, pressuring the index.

The S&P has risen for three straight sessions, extending its rise for the year to more than 13 per cent and eclipsing all of 2012's gains.

The gains so far have come on strong corporate results and accommodative policies from the Federal Reserve, two factors that may now be priced into markets. Last week's jobs report was unexpectedly strong, helping to fuel market gains.

"Every rule needs an exception. The age old mantra that says 'Sell in May and go away' is at least giving investors a good opportunity to set up positions in the event this year it continues to hold true," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York.

"Naturally, it is early days for the month of May, yet we continue to invite fate by suggesting that 2013 will be the exception that proved the rule," he added.

Equities this year have gone without a sustained pullback as investors use any market decline to add to positions. Many analysts expect markets to trend higher, but some see a near-term pullback, citing a lack of positive catalysts and mixed economic data.

The Dow Jones industrial average was up 33.98 points, or 0.23 per cent, at 15,002.87.

The Standard & Poor's 500 Index was up 3.80 points, or 0.23 per cent, at 1,621.30.

The Nasdaq Composite Index was down 2.03 points, or 0.05 per cent, at 3,391.14.

Apple shares fell 0.7 per cent to $457.46 in volatile trading after rising for the past three sessions. First Solar shares were off 8.5 per cent at $43.69 after reporting earnings below Wall Street expectations late Monday. Netflix shares were off 1.4 per cent at $207.57.

Both Fossil Inc and DirecTV reported earnings that surged past expectations. Fossil jumped 8.4 per cent to $107.32 as one of S&P 500's top percentage gainer, followed by DirecTV, up 3.8 per cent to $60.18.

Earnings have largely been better than expected. Some 67.4 per cent of S&P 500 companies have surpassed estimates so far. At the same time, revenues have been disappointing.

Recent gains have come on strength in technology and banking shares, two groups that are closely tied to the pace of growth.

A second proxy advisory firm has said that JPMorgan Chase & Co should have an independent board chairman over its chief executive officer and should have some new directors. The stock was up 1.1 per cent at $48.71.