S&P 500 Fluctuates Near Record as Investors Weigh Economy

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U.S. stocks fluctuated, with the Standard & Poor’s 500 Index trading near its record closing level, as investors assessed the strength of the economy and developments in Ukraine.

Urban Outfitters Inc. (URBN) dropped 4.7 percent after saying it remains cautious about its performance in the first quarter. American Eagle Outfitters Inc. tumbled 5.4 percent after forecasting results that trailed analysts’ estimates. J.C. Penney Co. rallied 8.7 percent after Citigroup Inc. raised its recommendation on the retail chain.

The S&P 500 fell 0.1 percent to 1,875.06 at 11:46 a.m. in New York. The benchmark index closed at an all-time high of 1,878.04 on March 7. The Dow Jones Industrial Average lost 24.98 points, or 0.2 percent, to 16,393.70 today. Trading in S&P 500 stocks was 25 percent below the 30-day average at this time of day.

“The equity market is going to make continued progress in a two-steps-forward, one-step-back kind of progression,” Jim Russell, who helps oversee $115 billion as a senior equity strategist for U.S. Bank Wealth Management, said by phone. “We’re still evaluating how much of the economic weakness is weather related and how much of it is legitimate. We’re hopeful that much of the weakness we’ve seen is weather related and that we’ll get a snapback in the second quarter.”

The S&P 500 rallied 4.3 percent in February after Federal Reserve Chair Janet Yellen said the economy was strong enough to withstand measured reductions to the central bank’s monthly bond purchases. Three rounds of Fed stimulus have helped push the S&P 500 up 177 percent from a 12-year low, as U.S. equities begin the sixth year of a bull market that started March 9, 2009.

Economic Data

The Fed is trying to determine how much of the recent economic cooling has been due to weather. U.S. employers added more workers than estimated in February, a Labor Department report showed last week. Other reports indicated manufacturing expanded faster than projected last month, while consumer spending rose more than estimated in January.

“Stocks seem to shrug off any hits that would have moved them lower and the thinking is probably that Yellen will come in and bring liquidity to the market if we get anywhere close to a substantial correction, so why not enjoy the party while it lasts,” Matt McCormick, who helps oversee $11 billion as a portfolio manager at Cincinnati, Ohio-based Bahl & Gaynor Inc., said by phone.

The S&P 500 fell less than 0.1 percent yesterday as a report showed Chinese exports unexpectedly slumped last month and Ukraine began military drills.

Russia is wresting control of Ukraine’s Crimean peninsula, home to its Black Sea Fleet, sparking the worst crisis between Russia and the West since the Cold War. The European Union told Russia it must switch course in Crimea by next week or risk more sanctions as Ukraine’s deposed president warned of a possible civil war.

Ukraine’s Borders

Ukraine’s Interior Minister Arsen Avakov said today the country may mobilize 20,000 people to protect its borders. Ukraine says Russia has almost 19,000 soldiers in Crimea, which holds a referendum on March 16 on whether to secede.

Investors have added $13.1 billion to U.S. equity exchange-traded funds in the past five days and withdrawn $8.2 billion from bond ETFs, data compiled by Bloomberg show. Real-estate stocks absorbed the most money among industry ETFs, taking in $564 million during the past week.

Three of 10 main industries in the S&P 500 rose today, with technology shares advancing the most. Apple Inc. jumped 1.1 percent to $536.76. Phone companies and energy shares slumped the most. The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, fell 0.3 percent to 14.24.

J.C. Penney jumped 8.7 percent to $9.15 after Citigroup upgraded the shares to buy from neutral, saying the company will meet its revenue and margin forecasts this year. The retailer predicted on Feb. 26 that gross margin will improve and same-store sales will increase by a mid-single digit percentage this year.

FuelCell Energy

FuelCell Energy Inc. rallied 16 percent to $4.55. First-quarter revenue of $44.4 million exceeded the $42.3 million estimate of analysts in a Bloomberg survey. Shares of the fuel-cell manufacturer have more than doubled this month.

Urban Outfitters slipped 4.7 percent to $35.75. Chief Executive Officer Richard Hayne said he expects poor weather to contribute to lower sales and profit margins in the first quarter for its Urban Outfitters-branded shops. The clothing retailer also reported earnings of 59 cents a share for the fourth quarter, beating the average analyst estimate of 54 cents.

American Eagle Outfitters lost 5.4 percent to $13.45. The teen-apparel retailer seeking a new chief executive officer said it would break even in the current quarter. The average of analysts’ estimates compiled by Bloomberg was for profit of 12 cents a share. Same-store sales will fall by a high single-digit percentage, the company said, a worse performance than the 2.3 percent decline analysts projected.