Demand for Pfizer stock helps lift Wall Street

Dow Jones:12,400.03 (+23.31) S&P 500:1,332.87 (+0.46) Nasdaq:2,789.19 (–0.41)

THE S&P 500 met tough resistance yesterday, failing to break a level that has held since mid-February even as a spate of deals and underlying strength in the economy spurred optimism.

But caution ahead of earnings season held volume to its lowest level this year and suggested the recent rally may be fading.

The benchmark S&P 500 hovered slightly below 1,333, which it has not closed above since mid-February.

“Volume has dried up here as investors and traders are sitting on their positions to see what happens” in the upcoming earnings season, said Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford, New York.

Larry McMillan, president of McMillan Analysis, said the market is due for a short-term correction as technical indicators suggest the market is overbought.

“Overall, the picture is still bullish, but the market is acting tired because it’s overbought. With the month-end bullish influences winding down, there could be a short-lived pullback at hand,” he said.

The Dow Jones industrial average rose 23.31 points, or 0.19 per cent, to end at 12,400.03.

The Standard & Poor’s 500 Index was up just 0.46 of a point, or 0.03 per cent, at 1,332.87.

The Nasdaq Composite Index was down 0.41 points, or 0.01 per cent, at 2,789.19.

The European Central Bank, at its policy meeting on Thursday, is expected to raise rates by 25 basis points from a record low in reaction to rising inflationary pressures in the euro zone. Two more 25-basis-point rate hikes are factored in by the end of the year.

Molycorp jumped 12 per cent.

Pfizer rose 0.8 per cent to $20.54 after the drugmaker agreed to sell its Capsugel unit, the world’s largest maker of hard capsules, to private equity firm KKR for nearly $2.4 billion.

Shares of defence contractor General Dynamics dropped 5.2 per cent to $73.37 after one of its Gulfstream Aerospace jets crashed on a test flight, killing four.

Southwest Airlines shares fell 1.7 per cent to $12.46 after about 70 flights were cancelled for safety inspections. A Southwest jet made an emergency landing with a hole in the cabin on Friday. – (Bloomberg/Reuters)