Photographer: Michael Nagle/Bloomberg

Stock Coma Outlasts Earnings as S&P 500 Fails Round Number Test

  • 2,400 too hard a hurdle to pass for the second time this year
  • Investors reluctant to bail yet as VIX hits lowest since 1993

The somnolent tone in U.S. stocks lasted another week, with a string of motionless sessions elongating just as the S&P 500 Index approached its latest round-number milestone.

Unmoved by politics, the economy or earnings, the benchmark gauge slipped 0.4 percent over the five days, as double-digit losses in retailers Macy’s Inc. and Nordstrom Inc. were offset by equally large rallies in Nvidia Corp. and Advanced Micro Devices. While closing at a record 2,399.63 on Wednesday, the index has been hovering just below 2,400 for the better part of two weeks.

“A continuous rejection of the 2,400 level has kept more substantial demand at bay,” Frank Cappelleri, a technical analyst at Nomura Instinet in New York, wrote in a note. “The solution for this is any easy one: make new highs. Easy, yet challenging to actually accomplish.”

While low volatility is the rule, low-volatility stocks have not been a beneficiary. The PowerShares S&P 500 Low Volatility Portfolio slid 0.9 percent, its biggest weekly drop since January.

The S&P 500 posted its first loss in four weeks, sliding to 2,390.90. The Dow Jones Industrial Average decline 0.5 percent, or 110.33 points, to 20,896.61.

Bucking the downtrend, the Nasdaq Composite Index increased 0.3 percent to 6,121.232, as Apple Inc. rallied 5.2 percent, becoming the first American company with a market value over $800 billion.

U.S. stocks showed resilience amid financial turmoil in China and President Donald Trump’s firing of FBI Director James Comey. But with first-quarter earnings coming to a close and equities near the highest valuations since the aftermath of dot-com era, investors are reluctant to take on more risk.

For the second time this year, 2,400 proved too high a hurdle for the S&P 500. The index first surpassed the threshold in March without being able to hold it. It exceeded it again in trading on Monday and Tuesday, but both times ended below.

For 14 straight sessions, the S&P 500 has been both within 0.5 percent of its all-time high and stuck in a 0.6-percent trading range. A similar stretch of stillness has never happened before, according to data compiled by Bloomberg.

Along the way, the CBOE Volatility Index sank to 9.77 on Monday, the lowest level since at least 1993.

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