A lot of punches are thrown at the U.S. stock market. Not that many land.
The Organization for Economic Cooperation and Development took a whack at the index today, cutting its forecast for global growth amid a lack of investment and waning confidence. Liz Ann Sonders, chief investment officer at Charles Schwab Corp., stepped up to say the index is at an “elevated risk” for a 10 percent pullback.
The Standard & Poor’s 500 Index parried the blows, climbing within 10 points of an all-time high as it churns in the tightest trading range at this time of year since 2006.
“The market is trading higher partly because people don’t know where else to go,” Robert Pavlik, who helps oversee $9 billion as chief market strategist at Boston Private Wealth in Boston, said by phone. “People are nervous about valuations, but we’re still in an upward trajectory.”
The S&P 500 gained 0.2 percent to 2,114.07 on Wednesday, about 0.8 percent from a record reached May 21. The index hasn’t had a 10 percent decline since October 2011, the longest stretch without a drop of that magnitude since a 55-month period ending in October 2007.
While the market has remained resilient, it has also stayed in a narrow track. The benchmark index is just 0.7 percent away from its 50-day moving average. The spread between the highest and lowest close in the S&P 500 this year is only 6.9 percent.
Sonders compared the market to the U2 song “Running to Stand Still” in an interview on Bloomberg Radio’s “Surveillance” with Tom Keene. She expressed concern over the risk of a higher-magnitude pullback than what the stock market has seen in the last few years.
Sonders said stocks are “at the top end of a cyclical channel,” after the S&P 500 has more than tripled during its six-year bull run. The S&P 500 hasn’t had back-to-back gains in more than two weeks, as investors assess mixed economic data for clues on when the Federal Reserve will boost borrowing costs. The showdown in Europe over Greece’s debt crisis has also added to uncertainty.
The OECD cited a possible Greek default for hurting confidence, and said big companies are reluctant to spend on capital equipment, which is holding back employment and wages. The organization said in a semi-annual report that the world economy will expand 3.1 percent this year, down from the 3.7 percent predicted last October.
Equities got a boost today as European Central Bank President Mario Draghi said monetary policy stimulus is filtering through to the real economy. Investors are also speculating that Greece will reach a deal.
The Dow Jones Industrial Average rose 64.33 points, or 0.4 percent to 18,076.27. The Nasdaq Composite Index climbed 0.5 percent, while the Russell 2000 Index advanced 1 percent to a five-week high.
Among stocks moving today, Citigroup Inc. rallied to its highest level this year, while JPMorgan Chase & Co. and Wells Fargo & Co. gained more than 1 percent. MetLife Inc. jumped 2.2 percent. Trucking companies led a surge in transportation shares. Utilities tumbled 1.4 percent, and energy shares declined with oil. Intel Corp. fell for a third day to weigh on semiconductors.
Seven of the S&P 500’s 10 main groups rose, led by phone companies, financial and consumer discretionary shares. Banks in the benchmark index climbed the most of 24 industry groups, with Wells Fargo reaching a record, and Comerica Inc. at an eight-month high.
The Chicago Board Options Exchange Volatility Index declined 4.1 percent Wednesday to 13.66. The gauge, known as the VIX, last month had its steepest drop since February.