U.S. Stocks End Mostly Lower; Nasdaq Gains

By Dan Strumpf 

The Nasdaq Composite Index resumed its march toward record highs Thursday, boosted by a rebound in Apple Inc. shares, even as other stock benchmarks inched lower.

The Nasdaq advanced 20.75 points, or 0.4%, to 4987.89, bringing the technology-laden index within striking distance of 5000 and 1.2% from its record close of 5048.62 last reached 15 years ago.

The Dow Jones Industrial Average lost 10.15 points, or 0.1%, to 18214.42, pulling back from Wednesday's record close.

The S&P 500 slipped 3.12 points, or 0.15%, to 2110.74.

Trading activity was relatively light, as the fourth-quarter earnings season drew to a close, and fears over Greece's bailout continued to recede.

Tom Carter, managing director at JonesTrading, said the absence of market-moving headlines was prompting some investors to curtail winning bets.

"They look at their portfolio and there are stocks that have ripped, that have done nicely," he said. That leads them to think, "I'm going take some money off the table and I'm going to redeploy it."

A renewed selloff in oil prices dragged oil and gas stocks lower. U.S. crude-oil futures lost 5.3% to $48.30 a barrel. Energy companies posted the sharpest losses within the S&P 500, with the energy sector index down 1.8%. "You have energy dragging down the overall index," said Brian Fenske, head of sales trading at ITG.

The Nasdaq Composite, however, resumed its recent rally. The index, which has risen for 11 of the last 12 sessions, was bolstered by a rally in shares of Apple Inc., which gained 1.3%, rebounding from a prior-day slide.

Also lifting the index was a 15% leap in shares of Avago Technologies Ltd. after the semiconductor maker said it would buy Emulex Corp. for $606 million. Emulex jumped 25%.

Despite those gains, major stock benchmarks have moved modestly in recent weeks, coinciding with a drawdown in trading volumes and market volatility. The CBOE Volatility Index, or VIX, hovered around its lowest level since early December, recently edging up to 14 on Thursday.

"Once you come off that cycle of big macro headlines, you sit around and wait for what's next," said Larry Weiss, head of trading at Instinet. Stocks "are kind of range bound," he said.

The S&P 500 is up 2.5% this year, on the heels of an 11% climb last year. Scott Armiger, chief investment officer at Christiana Trust, which oversees about $9 billion, said the firm has benefited from bets on shares of health care companies and consumer discretionary stocks. But stocks' march higher has him concerned that valuations have become too lofty.

"Stocks are rich," Mr. Armiger said. "We're not getting excited about any sector now. We're just kind of hanging out."

European stocks closed higher as the European Central Bank prepares to launch its bond-buying program. Germany's DAX rose 1% to a record close and France's CAC 40 added 0.6% and finished at its highest since June 2008.

In economic news, the consumer-price index fell 0.7% in January from December, the Labor Department said. Prices slipped 0.1% from a year earlier, marking the first year-over-year decline since October 2009.

In other markets, gold futures rose 0.7% to $1209.60 an ounce. Treasury prices fell, lifting the 10-year yield to 2.016% from 1.968% on Wednesday.

Morgan Stanley agreed to pay $2.6 billion to settle U.S. claims linked to the sale of mortgage bonds. Its shares fell 1.5%.

Bank of America Corp. agreed to pay a group lenders to the failed Fontainebleau Las Vegas $300 million to settle allegations it improperly advanced funds to the casino project as its finances deteriorated. Its shares fell 2.7%.

Salesforce.com Inc. posted a 26% jump in quarterly revenue from a year ago, driven in part by international sales. The company's shares advanced 12%.

Write to Dan Strumpf at [e-mail]

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