U.S. Stocks Fluctuate Amid Iran Deal After Setting Record

According to Bloomberg,

U.S. stocks fluctuated after benchmark indexes closed at all-time highs and Iran agreed to limit its nuclear program.

Alcoa Inc. climbed 4.6 percent and Caterpillar Inc. rose 2.3 percent after analysts recommended buying the shares. An index of airlines reached an almost seven-year high as crude slid. Qualcomm Inc. lost 2.4 percent as the company said a Chinese agency started a probe related to an anti-monopoly law. Homebuilders retreated 1.3 percent as a group as the number of contracts Americans signed to buy previously-owned homes unexpectedly fell.

The S&P 500 rose 0.1 percent to 1,806.56 at 11:34 a.m. in New York, erasing an earlier decline of as much as 0.1 percent. The gauge closed for the first time above 1,800 on Nov. 22. The Dow Jones Industrial Average added 36.89 points, or 0.2 percent, to 16,101.66. Trading in S&P 500 stocks was 6.9 percent below the 30-day average during this time of the day.

“The market is not necessarily over-extended, but probably moderately rich,” Cam Albright, director of asset allocation at the investment advisory unit of Wilmington Trust, said by phone from Wilmington. The firm oversees about $79 billion. “It’s probably difficult to envision this market getting a lot more upside unless it has this continued success on earnings and economic growth. The deal with Iran takes some of the risk premium out of the marketplace for the moment at least.”

NYSE (Bloomberg)
NYSE (Bloomberg)

Iran Accord

Iran agreed yesterday to curtail nuclear activities in return for easing of some sanctions on oil, auto parts, gold and precious metals, an accord that broke a decade-long deadlock.

The S&P 500 has rallied 27 percent this year as the Federal Reserve continued to buy $85 billion of bonds a month to stimulate economic growth. If the gauge holds on to its gains, it will mark the best year for U.S. equities since 1998.

The index is trading for about 17 times its companies’ reported earnings. While the valuation reached the highest level since May 2010, it’s still below the multiples at the market’s two previous peaks, when the ratio reached 17.5 in October 2007 and 31 in March 2000, data compiled by Bloomberg show.

Four out of five investors expect the Fed to delay a decision to begin reducing the stimulus until March 2014 or later, according to the Bloomberg Global Poll of investors, traders and analysts who are subscribers. Just 5 percent are looking for a move at its Dec. 17-18 meeting, the Nov. 19 poll showed.

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