Wall St. gains; S&P 500 sets record intraday high

June 4, 2014

By Angela Moon

NEW YORK (Reuters) – U.S. stocks rose on Wednesday, with the S&P 500 hitting another intraday record high as investors brushed off weaker-than-expected labor market data and focused on an acceleration in services-sector growth.

But with the Dow and the S&P 500 near record levels, volume continued to be light ahead of the European Central Bank meeting on Thursday and the U.S. government’s May nonfarm payrolls report on Friday.

Semiconductors ranked among the day’s biggest gainers. The Philadelphia semiconductor index, known as the SOX <.SOX>, rose 0.3 percent, down from a 14-year high touched earlier on Wednesday. Many market participants, however, are becoming concerned about the sector, with the index is up for the 10th straight session and up 14 percent for the year so far.

Key semiconductor markets like industrials and autos are likely to face slow demand in the second half of the year, according to a Goldman Sachs research note. The note also pointed out that inventories are building and the sector’s valuation is no longer attractive.

The CBOE Volatility Index <.VIX> jumped 0.9 percent, its third straight daily advance. The VIX, known as the “fear index,” remained just below 12 and well below the historical average of 20 – a trend that some interpret as a sign that investors have become complacent.

The Dow Jones industrial average <.DJI> rose 9.25 points or 0.06 percent, to 16,731.59. The S&P 500 <.SPX> gained 3.21 points or 0.17 percent, to 1,927.45. The Nasdaq Composite <.IXIC> added 18.24 points or 0.43 percent, to 4,252.32.

If the S&P 500 closes higher on Wednesday, that will mark its eighth advance out of the past nine sessions – a run in which the broad index has set multiple record highs.

In macroeconomic news, the Institute for Supply Management’s non-manufacturing index showed that growth in the U.S. services sector accelerated more than expected in May and rose at the fastest pace in nine months. The ADP National Employment Report showed that fewer private-sector jobs were added in May than had been anticipated.

“With some data strong and other data weak, we don’t have a clear picture of the market or the economy right now,” said Adam Sarhan, chief executive officer of Sarhan Capital in New York.

“We don’t seem to be strong enough to grow without help from the Federal Reserve, but we do seem to be trending in the right direction.”

While economic reports have largely been positive lately, investors are concerned about any data that could indicate weakness in Friday’s May jobs report.

In company news, Protective Life surged 18.1 percent to $69.33 in heavy trading after Japan’s Dai-ichi Life Insurance Co <8750.T> agreed to buy the company for $5.7 billion.

The stock of Tibco Software Inc was one of the Nasdaq’s most active, slumping 6.7 percent to $19.40 a day after the company gave a second-quarter outlook sharply below expectations.

NQ Mobile Inc soared 37.1 percent to $10.46, its biggest one-day advance ever, rising on heavy volume after the Chinese mobile security software maker said a special committee had found no evidence of fraud, following an accusation made by short-seller Muddy Waters Research Group.

(Reporting by Angela Moon; Editing by Jan Paschal)

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