Market Wrap: Stocks Drift Sideways; S&P 500 Hits New High

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Stocks Hit Intraday Record
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Even in a daylong sideways drift, the Standard Poor’s 500 index (^GPSC) managed to eke out its third record close in three days.

U.S. stocks ended essentially flat on Wednesday after spending much of the day wavering between tiny gains and losses.

The SP 500 notched a gain of one-tenth of a point over the day before, extending its rise for the week.

Overall trading volume was about one-third below the recent average, reflecting an absence of major market-moving news and the approaching Labor Day holiday weekend.

Having achieved this 2,000 level, the market is simply taking a pause, catching its breath.


It was a sharp contrast to the day before, when the SP 500 closed above 2,000 for the first time.

“Having achieved this 2,000 level, the market is simply taking a pause, catching its breath,” said David Lebovitz, global market strategist at JPMorgan Chase.

U.S. stock futures pointed to a mixed opening in premarket trading Wednesday. The major stock indexes opened slightly higher, with the SP 500 index at 2,001 points.

Early on, investors largely had their eye on company earnings. Retailers Express (EXPR) and Tiffany Co. (TIF) were among the companies to post better-than-expected results. Express’ shares surged 12.7 percent, adding $1.86 to $16.45., while Tiffany rose 98 cents to $101.75.

At 10 a.m., the Congressional Budget Office offered a new assessment of the nation’s economy, projecting it will grow by just 1.5 percent this year. The forecast was considerably more pessimistic than the Obama administration’s, which predicted the economy would expand by 2.6 percent.

Stocks declined shortly afterward, then recovered, only to waver through small gains and losses through much of the day.

The SP 500 rose 0.10 of a point to 2,000.12. The Dow Jones industrial average (^DJI) rose 15.31, or 0.1 percent, to 17,122.01. The Nasdaq composite (^IXIC) fell 1.02 points to 4,569.62.

The Dow is 16 points shy of its own record closing high set July 16. The Nasdaq is still well below its dot-com era record.

Major U.S. indexes are riding a three-week streak of gains and are up for the year.

Investors have been encouraged in recent weeks by strong corporate earnings and data that point to a strengthening economy after a sluggish start to the year. The trend has helped extend a five-year bull market, lifting indexes to new records this year.

It’s likely that trading will continue to thin further in the next couple of days as more investors get in vacation mode for the Labor Day holiday weekend.

Before that, however, the market will get a look at a few more economic barometers.

On Thursday, the Commerce Department delivers its latest estimate of how much the U.S. economy grew in the second quarter. Economists are looking for 3.9 percent growth after a decline of 2.1 percent in the first quarter.

New figures on personal income and spending and on how consumers feel about the economy, are due out Friday.

Among stocks making moves Wednesday:

  • Best Buy (BBY) notched the biggest gain among companies in the SP 500, adding $1.89, or 6.3 percent, to $31.69.
  • U.S. medical device maker Medtronic (MDT) bought privately held Italian company NGC Medical S.p.A. for $350 million. NGC manages cardiovascular suites, operating rooms and intensive care units for hospitals. Medtronic already held a 30 percent stake in the business. Medtronic slipped 25 cents to $63.27.

Bond prices rose. The yield on the 10-year Treasury note fell to 2.36 percent. Benchmark U.S. crude rose 2 cents to $93.88 a barrel in New York. In metals trading, gold fell $1.80 to $1,283.40 an ounce, silver rose 2 cents to $19.41 an ounce and copper fell a penny to $3.18 a pound.

-AP Business Writer Elaine Kurtenbach in Tokyo contributed to this report.

What to Watch Thursday:

  • At 8:30 a.m. Eastern time, the Labor Department releases weekly jobless claims, and the Commerce Department releases second-quarter gross domestic product.
  • At 10 a.m., Freddie Mac releases weekly mortgage rates, 10 a.m., and the National Association of Realtors releases pending home sales index for July.

These major companies are scheduled to release quarterly financial statements:

  • Abercrombie Fitch (ANF)
  • Coty (COTY)
  • Dollar General (DG)
  • Genesco (GCO)
  • Signet Jewelers (SIG)
  • Splunk (SPLK)
  • Toronto Dominion Bank (TD)
  • When you get into that back office and start signing all the paperwork, the topic of extended warranties will come up pretty quickly. Ellie Kay, an author of 15 finance-related books, notes that such warranties are negotiable.

    “Before you sign on the dotted line, check out other sources of extended warranty pricing,” she says, such as those provided by your bank or insurance company. “Then either use this lower price in the financial and insurance office for negotiation to get them to match the price, or buy it from the other source.”

    A scenario from Kay during her last car purchase: “The dealer quoted me $4,200 for a three-year extended warranty for my 280SLK Roadster Mercedes that included a $250 deductible. USAA — my insurance company — gave me a three-year warranty for $3,200 with zero deductible. I’ve used the new warranty once already. The bill was $1,100 and I paid nothing because of the zero deductible.”

    Bottom line: The default extended warranty is almost always the worst deal.

    1. You’ll get the dealer’s extended warranty

  • You may have a monthly payment figure in your head when shopping for a new car, but your interests are better served when you focus on the out-the-door price instead.

    “A sales rep can often trick you by offering a lower monthly payment, but [one that] will stretch out the terms of the loan,” says David Bakke, a car buying expert at MoneyCrashers.com.

    You can reduce the overall cost of the car via negotiation and by skipping accessories and add-ons. “Things like navigation systems, rims, floor mats or car audio/entertainment systems can be purchased from a third party vendor, usually for less.”

    All our experts agree: Don’t even mention your preferred or maximum monthly payment price.

    2. You’ll negotiate based on your monthly payment

  • 3. You’ll cave on your trade-in price

  • It may be tempting to just head to one local dealership, take a test drive or two, and walk out the door with a new car, but you’ll save yourself a lot more money by doing a little pre-shopping research.

    “Once you have your choices narrowed down to a few makes or models, contact the Internet sales manager of a few dealerships,” suggests Bakke. “These folks can often offer better pricing than what you’d find dealing with an on-site sales person. Plus, you save time.”

    In addition to, or in lieu of, e-shopping, Joshua Duvall of Capital Financial Services says to “find a few vehicles from different manufacturers and pit them against one another.” He explains that the car buying market is based on quantity and the fact that dealers want to move cars. “Force them to compete for your business.”

    4. You won’t shop around enough or do enough research

  • “Dealerships often employ hard-sell tactics that can be overwhelming for a first-time buyer, so it is a good idea to go with someone who has been through the process before,” explains John Ganotis, founder of CreditCardInsider.com.

    Granotis also says that if you’re buying a used vehicle, it’s wise bring along a friend who knows his or her stuff when it comes to car health. For example, a mechanic who can peek under the hood, or recognize if something subtle is wrong during the test drive, would be especially handy.

    5. You’ll go to the dealership alone

  • 6. You’ll buy new

  • OK, so sometimes ol’ Sally breaks down, and you need to get a new set of wheels, stat. If you don’t fall into that category, though, our experts recommend choosing your purchase date strategically, such as during a major sale. Better yet, wait for the end of a promotion.

    Dealership salespeople often receive a bonus if they meet their targets during a promotion. Even if they lose money on a vehicle at the end of a promotion, they typically make up for the loss with their promotion target bonus.

    Erin Konrad of CouponPal suggests buying near the end of the month. This is when salespeople are trying to meet monthly quotas and are more likely to negotiate.

    7. You’ll rush to buy

  • Be familiar with common strategies employed by dealerships and sellers. For example, MSN Money warns against the “four-square” trick. (I’ve had this one used on me.) In this trick, the salesperson draws four boxes with a number in each: your old car’s trade-in value, the new car’s price, the down payment, and your monthly payment. “From there, the salesperson begins crunching numbers — most likely making it too hard for you to follow,” writes MSN. He or she will shift your focus to the monthly payment, which can result in a longer loan and a higher interest rate.

    Another common trick is to heighten your sense of urgency, says Business Insider via Gregg Fidan, founder of RealCarTips.com and the author of “Honest Guide to Buying a Car.” For example, the dealer may tell you “that color is not available; there’s only three left statewide; the price is good only for today; someone else is interested in the car, better decide quickly, etc.” In this case, be patient and courteous, but remain level-headed and never rush to buy. Study up on Fidan’s list of 112 car-buying scams.

    To sum up the list: Don’t let yourself get too caught up in the excitement of shiny metal, and remember that in six months that “new car excitement” will have faded, and you’ll be due for an oil change.

    8. You’ll fall for sales tricks

  • More from Wendy Rose Gould:

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