MARKET SNAPSHOT: S&P 500, Nasdaq Drift To Records, But Trading Choppy In French Election's Wake

Vix falls to lowest level in 24 years

The S&P 500 and the Nasdaq Composite set fresh records intraday Monday, but trading activity was listless after Emmanuel Macron's closely watched but expected presidential election victory in France on Sunday.

The Dow Jones Industrial Average was 15 points, or less than 0.1%, lower at 20,993. The blue-chip average had been supported by a stronger-than-expected jobs report on Friday, which helped it close above 21,000 for the first time since early March. The S&P 500 slipped 4 points, or 0.1%, at 2,396, after briefly hitting a new intraday record of 2,401.23 in early trading.

The Nasdaq also touched a intraday all-time high at 6,106.12, but fell 0.2% to 6,087.

A lack of surprise in the French election left investors struggling to find new catalysts to keep pushing shares higher, but the easing of geopolitical concern contributed to the 7.4% decline in the CBOE Volatility index , a measure of investor anxiety. The index fell as low as 9.72, its lowest level since 1993 (http://www.marketwatch.com/story/wall-streets-fear-gauge-just-hit-its-lowest-level-in-24-years-2017-05-08). If the VIX closes under the level of 10, that would mark only the 11th such time it has closed in single digits since debuting in 1990.

Volatility was seen as likely under a Le Pen victory, as she had proposed removing France from the European Union. Investors had backed Macron because he was seen as a safer choice for regional stability, and not because of the specifics of his policies.

"I think Mr. Macron is in for tough challenges from both the left and the right and the country may, in effect, become ungovernable, before all is said and done," Mark Grant, chief strategist at Hilltop Securities, wrote in a research note. He added that for investors, "the rejoicing may be brief."

Asian stocks appeared to be one of few places that were getting a positive boost from Sunday's victory for French centrist Macron over far-right candidate Marine Le Pen. European stocks pulled back from a nine-year high (http://www.marketwatch.com/story/european-stocks-pull-back-from-21-month-high-after-macron-wins-french-election-2017-05-08), with the French CAC 40 index last down 1%.

See: What will be the hot pick from this year's Sohn hedge-fund conference? (http://www.marketwatch.com/story/what-will-be-the-hot-pick-from-this-years-sohn-hedge-fund-conference-2017-05-05)

Grant said some investors may shift the focus to French parliamentary votes in June, with questions about Macron's ability to build a majority.

"It is entirely possible that [Macron] won't secure enough seats to push through his agenda. His party will face stiff opposition for the two main French political parties as well as the Le Pen group which are far better organized, in my opinion, than Mr. Macron's group...I think the investment focus will shift, and rather quickly, to the Parliamentary elections and the governance of France as skepticism grows, once again, about the French economy, and the place of France in the European Union."

Read:Macron handily wins French presidential election--seen as an upbeat sign for the stock market (http://www.marketwatch.com/story/macron-handily-wins-french-presidential-electionan-upbeat-outcome-for-wall-street-2017-05-07)

See also:Investors are breathing a sigh of relief over France, for now (http://www.marketwatch.com/story/investors-are-breathing-a-sigh-of-relief-over-france-for-now-2017-05-07)

Recent action in equities has been slight. As of Friday, the S&P moved less than 20 points in either direction for eight consecutive days, the longest streak since 1964. However, some say that could be a good omen for stocks going forward (http://www.marketwatch.com/story/stocks-just-did-this-for-the-first-time-since-the-beatles-landed-in-us-2017-05-06).

Markets won't be getting any directional cues from U.S. data, as there are no top-tier readings due Monday. However, investors did have commentary from Federal Reserve officials to digest.

Cleveland Federal Reserve President Loretta Mester said the Fed must be "very vigilant against falling behind (http://www.marketwatch.com/story/feds-mester-warns-against-going-too-slow-with-interest-rate-hikes-2017-05-08)" on needed interest-rate hikes, adding that "we could risk a recession" if the central bank delayed too long on normalizing rates.

Separately, St. Louis Fed President James Bullard said the Fed's benchmark federal-funds rate is close to where a famous mathematical rule recommends it should be (http://www.marketwatch.com/story/feds-bullard-says-target-interest-rate-is-close-to-where-taylor-rule-recommends-2017-05-08).

Stock investors may turn to the annual Sohn Conference for market drivers, where a number of major hedge-fund managers will speak on the market and could offer market-moving calls on individual companies.

Stocks on the move: Shares of Kate Spade & Co.(KATE) jumped 8.3% on news luxury handbag retailer Coach Inc.(COH) will buy its rival in a deal valued at $2.4 billion. (http://www.marketwatch.com/story/kate-spades-stock-soars-after-24-billion-coach-buyout-deal-2017-05-08)Shares of Coach rose 5.2%.

Sinclair Broadcast Group Inc.(SBGI) is nearing a deal to buy Tribune Media Co.(TRCO) for close to $4 billion, in a tie-up that would combine two of the country's biggest local-television operators, according to a report in The Wall Street Journal (http://www.marketwatch.com/story/sinclair-closes-in-on-4-billion-deal-to-buy-tribune-media-2017-05-07), which cited sources. Shares of Sinclair sank 2.5% while Tribune rose 5.2%.

Read:Live-blog recap from Berkshire Hathaway's annual meeting featuring Warren Buffett (http://www.marketwatch.com/story/advice-from-berkshires-annual-meeting-stay-sane-be-honest-2017-05-07)

(http://www.marketwatch.com/story/advice-from-berkshires-annual-meeting-stay-sane-be-honest-2017-05-07)Other markets: In Asia, Japan's Nikkei 225 index reached a 16-month high (http://www.marketwatch.com/story/nikkei-other-asian-markets-surge-after-macrons-victory-2017-05-07) and Korea's Kospi hit an all-time high, helped in part by the French election result, but also enthusiasm following the U.S. jobs report.

Oil prices traded up and down on Monday (http://www.marketwatch.com/story/oil-rebounds-on-expectations-of-more-opec-production-cuts-2017-05-08), with West Texas Intermediate crude futures last up 0.6% at $46.55 a barrel, after tumbling around 6.3% last week. Crude made an attempt to retake the $47 level after Saudi Arabia's oil minister said a deal to cut production could be extended into 2018, before backing off.

Gold prices rose 0.3%.

Opinion:The commodity conundrum--why are prices so weak? (http://www.marketwatch.com/story/the-commodity-conundrum-why-are-prices-so-weak-2017-05-08)

The dollar was moving higher (http://www.marketwatch.com/story/euro-slips-from-6-month-high-as-macron-relief-rally-loses-steam-2017-05-08), as measured by the ICE U.S. Dollar Index , up 0.3% at 98.89. The dollar was largely gaining against the euro , which slipped from a 6-month high as a relief rally linked to the French election lost steam. The euro fell to $1.0950 from a close ahead of the French election on Friday of $1.0999.

(END) Dow Jones Newswires

May 08, 2017 12:35 ET (16:35 GMT)