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 The S&P 500 scored its third record closing high in a row while the
Dow surpassed its previous record close on June 10. The blue-chip
index hit an all-time intraday high at 16,978.02, coming close to
the 17,000 mark.
For the week, the three major U.S. stock indexes rose 1 percent as
investors brushed off geopolitical concerns about Iraq and focused
on the Federal Reserve's comments indicating that it will keep
interest rates low for a long period of time.
The benchmark S&P 500 has gained for six consecutive days,
supporting a cautious view that a near-term correction may be
inevitable.
"I haven't been concerned for weeks, but I'm becoming a bit
concerned now with where the market is, especially with many
indicators hitting levels that are contrary to the normal reading,"
said Randy Frederick, managing director of active trading and
derivatives for Charles Schwab in Austin, Texas.
The most notable indicators included the correlation of the CBOE
Volatility Index <.VIX>, known as the VIX, with the S&P 500. The VIX
usually moves inversely to the S&P 500.
The fear gauge is near its lowest since February 2007 while the S&P
500 is at an all-time high. For the VIX to be near the lowest level
in more than seven years while the S&P 500 is at a record high is
causing concern that the market may be too complacent.
"I'm expecting not a big correction like 10 percent or so, but a
good 3 to 4 percent adjustment next week won't be a surprise,"
Frederick said.
The VIX rose 2.2 percent to close at 10.85, still well below its
long-term average of 20.
Volume was higher than usual as Friday marked a "quadruple witching"
day - the expiration of stock options, index options, index futures
and single-stock futures.
The Dow Jones industrial average <.DJI> rose 25.62 points or 0.15
percent, to end at 16,947.08. The S&P 500 <.SPX> gained 3.39 points
or 0.17 percent, to 1,962.87. The Nasdaq Composite <.IXIC> added
8.71 points or 0.20 percent, to 4,368.04.
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For the week, the Dow rose 1 percent, the S&P 500 climbed 1.4
percent and the Nasdaq gained 1.3 percent.
Oracle Corp <ORCL.N> shares dropped 4 percent to $40.82 and ranked
among the biggest drags on the S&P 500. The stock's slide came a day
after the software maker posted fiscal fourth-quarter results that
disappointed investors looking for more progress against rivals
selling web-based services.
But CarMax <KMX.N> surged 16.5 percent to $52.75. The stock was the
S&P 500's best performer after the used-vehicle retailer reported
first-quarter earnings that topped analysts' expectations.
RadioShack Corp <RSH.N> was among the 18 stocks that hit a 52-week
low on the New York Stock Exchange on Friday. The stock hit a
lifetime low, dropping into penny-stock territory for the first time
on heavy volume. The stock fell 10.4 percent to 92 cents.
Volume was heavy after RadioShack's stock fell under the threshold,
with about 13 million shares exchanging hands, compared with its
composite 25-day average of 3.9 million.
About 7.2 billion shares changed hands on U.S. exchanges, well above
the average of 5.5 billion for the month to date, according to data
from BATS Global Markets.
(Editing by Jan Paschal)
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