US stocks waver after seven straight gains

NEW YORK (AP) ? Stock indexes wavered between small gains and losses on Wall Street Tuesday following a seven-day rally.

The Dow Jones industrial average was down five points, or 0.03 percent, at 14,442 as of noon EDT.

The Standard & Poor's 500 was down three points, or 0.2 percent, at 1,553. The Nasdaq composite dropped 15 points, or 0.5 percent, to 3,237.

The stock market has surged this year as investors became encouraged by a recovery in the housing market and a pickup in hiring. Strong corporate earnings and continuing economic stimulus from the Federal Reserve are also supporting demand for stocks.

The Dow has gained 10.3 percent so far in 2013, and last week it surpassed its previous all-time high of 14,164.53. The S&P 500 has risen 9 percent this year and is less than 1 percentage point away from its record close of 1,565.15 set in October 2007.

Peter Cardillo, chief market economist at Rockwell Global Capital, was among those saying investors should expect a pause in the market's advance.

"Nothing goes up forever," Cardillo said. "We will be headed for a correction somewhere along the line."

Merck was the biggest gainer on the Dow, advancing $1.41, or 3.2 percent, to $45.07 after the drugmaker said a data safety monitoring board recommended that a study of its cholesterol drug Vytorin should continue.

David Bianco, chief U.S. equity strategist at Deutsche Bank, said the S&P 500 index will likely maintain its momentum in the coming weeks and surpass its all-time high. Strong first-quarter corporate earnings reports could also push the market higher.

"I wouldn't be surprised if the market has a typical five percent pullback in the summer," said Bianco. "But I think we go higher before that happens."

The last significant pullback for stocks started before the Presidential elections in November, when the Dow fell 8 percent between Oct. 5 and Nov. 15 on concern that a divided government wouldn't be able to reach a budget deal to stop the U.S. going over the "fiscal cliff" of sweeping tax hikes and deep spending cuts.

Markets were mixed in Europe. Italy easily sold ?7.75 billion ($10 billion) in 12-month bonds, though at slightly higher interest rates. It was the first test of market sentiment since Fitch downgraded the country's credit rating on Friday due to political uncertainty there.

The Dow's biggest wobble this year came on Feb. 25, when it lost 1.6 percent after inconclusive results from Italian elections pushed the country toward political gridlock, threatening its ability to follow through on unpopular budget cuts demanded by its European neighbors. That gave investors a flashback to last spring, when a flare-up in Europe's debt crisis sent markets spiraling lower in the U.S. and Europe.

The yield on the 10-year Treasury note, which moves inversely to its price, fell to 2.03 percent from 2.06 percent.

Among stocks making big moves:

? Yum Brands Inc. rose $1.21 to $69.05 after the owner of KFC, Pizza Hut and Taco Bell announced a smaller-than-expected drop in its sales in China for the months of January and February following a food scare over its chicken suppliers.

? VeriFone Systems gained $1.26 to $21.72 after the company, a leading maker of terminals for electronic payments, said late Monday that its CEO is stepping down after recent stumbles cut the company's stock price nearly in half.

? Costco rose $1.84 to $104.20 after reporting that its fiscal second-quarter net income climbed 39 percent. The discount retailer pulled in more money from membership fees, its sales improved and it also recorded a large tax benefit. Even without the tax benefit the results were better than analysts had expected.

Source: http://news.yahoo.com/us-stocks-waver-seven-straight-gains-141411361--finance.html

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