U.S. Equities Mixed Amid Latest Round of Data
The U.S. stock market pulled back Tuesday, but Staples jumped after an upgrade and Apple, Tesla and Regeneron also climbed.
A reading on U.S. factory activity surpassed expectations, but didn't spark a rally for the main indexes.
"A lot of that was probably already built into the market," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co., noting that stocks achieved strong gains in August partly in anticipation of such upbeat economic data.
The S&P 500(SPX) was recently down 5 points, or 0.2%, to 1,999. The benchmark hit an intraday record above 2,006 just after the opening bell, then traded roughly flat before turning modestly negative.
The Dow Jones Industrial Average(DJI) fell 44 points, or 0.3%, to 17,055, while the Nasdaq Composite(RIXF) gained 3 points, or 0.1%, to 4,583.
Tuesday's action for the main indexes comes after the S&P 500 nabbed its 32nd record close this year on Friday. It finished the month 3.8% higher, representing the benchmark's best August performance since 2000. On Monday, the U.S. stock market was closed for the Labor Day holiday.
Movers and shakers: Staples Inc. (SPLS) jumped 7%, performing best among S&P 500 stocks, while Regeneron Pharmaceuticals Inc. (REGN) climbed 3.6% for the second-best gain.
Staples climbed after Credit Suisse hiked its rating for the retailer to outperform from neutral. Regeneron advanced following encouraging data on a cholesterol-lowering drug, according to a Dow Jones Newswires report.
Apple Inc. (AAPL) gained 0.7% and hit another intraday record, as buzz builds ahead of a Sept. 9 event at which the highly anticipated iPhone 6 and possibly the iWatch are expected to be unveiled.
Tesla Motors Inc. (TSLA) jumped 4.8%, also hitting an intraday record, as Stifel Nicolaus hiked its rating for the maker of electric cars to buy and set a $400 price target.
Wynn Resorts Ltd. (WYNN) fared worst among S&P 500 stocks, losing 5.4%. Casino operators dropped following news of an August decrease in gambling revenue in Macau.
(Read more about today's jumpiest stocks in the Movers & Shakers column http://www.marketwatch.com/story/apple-may-enter-mobile-payments-tesla-enters-china-2014-08-29.)
What strategists are saying: The S&P 500 topped 2,000 for the first time last week, and now analysts are already talking about the next milestone. Morgan Stanley economists and equity strategists said in a note on Tuesday that "a materially higher U.S. stock market with an S&P peak near 3,000 is possible," if the U.S. recovery continues.
"The current expansion is more than five years old, and with little evidence of global synchronicity, there are no signs as yet that the global economy is overheating," they said.
The U.S. stock market is likely to keep "grinding higher," helped by foreign investors for whom it's "the only place to go," said Baird's Bittles. But investors should remain aware of risks in the market, including the fact that zero interest-rate policies mean central bankers can't lower rates to counter outside shocks, according to Bittles.
Manufacturing momentum: The day's data highlight is the Institute for Supply Management manufacturing reading, and that figure came in at 59.0%, easily topping the consensus forecast from economists polled by MarketWatch. U.S. manufacturing companies grew in August at the fastest pace since March 2011, according to the ISM report.
Construction spending jumped 1.8% in July, also above expectations, and the final reading for Markit's U.S. manufacturing purchasing managers index was 57.9 in August, down slightly from the flash reading of 58.0.
This week's biggest economic news is expected to be Friday's jobs report. (Read more: Ahead of jobs data, U:S: economy still hitting speed bumps http://www.marketwatch.com/story/us-economy-still-hitting-speed-bumps-2014-08-31.)
Other markets: Asian equities closed mainly higher, while European stocks finished narrowly mixed.
Metals prices declined across the board, while oil prices moved sharply lower as well. The dollar advanced against most major currencies. The euro (EURUSD) reached a one-year low against the dollar amid uncertainty ahead of the European Central Bank meeting on Thursday.