US: Stocks little changed as S&P 500 hovers near all-time high

[NEW YORK] US stocks closed little changed, holding near records while investors brooded over the trajectory of Federal Reserve monetary policy after mixed economic reports.

Equities failed to make headway as consumer-staples companies capped the worst drop in six weeks, offsetting gains in technology and energy shares. General Mills Inc fell the most in almost two years, while Whole Foods Market Inc and Kroger Co lost more than 4 per cent, spurred by a 14 per cent drop in rival Sprouts Farmers Market Inc after the grocer cut its profit outlook.

Apple Inc rose after executives unveiled new products, and Facebook Inc advanced to a fresh high, extending its longest winning streak in five months.

The S&P 500 Index lost less than 0.1 per cent to 2,186.15 at 4pm in New York, after rising to within three points of an all-time high.

The Dow Jones Industrial Average declined 11.98 points to 18,526.14, and the Nasdaq Composite Index added 0.2 per cent to extend a record reached yesterday. About 6.3 billion shares traded hands on US exchanges, 6 per cent below the three-month average.

"The economic data that's come out in the past week or so has been underwhelming," said Walter Todd, who oversees about US$1.1 billion as chief investment officer for Greenwood Capital Associates LLC in South Carolina.

"There was a little hype about the Fed moving in September, but now we're back to where we were a month ago, questioning whether they're going to raise at all this year."

The S&P 500 been treading water since its Aug 15 record amid speculation on the path of interest rates and lacklustre data. The main US equity index has held in a band of 1.5 per cent for 39 days, the narrowest ever for that length of time, and has gone 42 sessions without a 1 per cent move in either direction, the longest since 2014.

Still, data from the Commodity Futures Trading Commission show that hedge funds are adding to long positions in the equity market and building up shorts against the CBOE Volatility Index.

Their bullishness contrasts with the views of Wall Street equity strategists, who see the S&P 500 retreating from its current level by the end the year. The measure of market turbulence known as the VIX fell 0.7 per cent Wednesday to 11.94, a two-week low.

Fed Bank of San Francisco President John Williams offered an upbeat assessment of the US economy in a speech on Tuesday. A report today showed job openings climbed to a record in July, rising by the most in six months.

Separately, the Fed's Beige Book survey of regional conditions said the economy grew at a modest pace in July and August as a strong labour market failed to put much upward pressure on wages and prices.

That follows recent disappointing readings on services-sector activity, manufacturing and hiring that cast doubt on the sturdiness of growth, even after strong consumer spending figures for July.

Fed-funds futures currently reflect a 22 per cent chance of an increase in borrowing costs this month, down from as high as 36 per cent before yesterday's services data. The first meeting with a better-than-even chance of a hike is December.

"Interest rates are off the table, but the picture is somewhat cloudy," said Patrick Spencer, London-based vice chairman of equities at Robert W Baird, which manages US$151 billion.

"People are very cautious because they've seen the recent economic indicators and they're concerned that 2017 will continue to see slower growth, but the data haven't been too bad."

In Wednesday's trading, consumer-staples in the S&P 500 fell 0.9 per cent, while technology shares rose for a fourth day to a 16-year high. Whole Foods retreated to a four-month low, and Kroger slumped the most since March. Also weighing on the staples group, Colgate-Palmolive Co lost 2 per cent, and Mead Johnson Nutrition Co sank 5.5 per cent.

Bolstering the tech group, Western Digital Corp surged 12 per cent, the best since last September, after raising its fiscal first-quarter outlook. Competing hard-drive maker Seagate Technology Plc increased 5.9 per cent to a five-month high.

A Bloomberg gauge of US airlines jumped the most in almost two months after Southwest Airlines Co said it would slow capacity growth next year, bringing the supply of seats and flights more in line with demand and possibly relieving pressure on fares. American Airlines Group Inc and Delta Air Lines Inc rallied more than 4.8 per cent.

Apache Corp advanced 6.7 per cent, the strongest since May, to lead energy producers after saying it made an "immense" oil and natural-gas discovery in an underdeveloped area of Texas' Permian shale formation, though a lack of infrastructure will pose challenges to bringing the fuel to market.

Among other shares moving on corporate news, Chipotle Mexican Grill Inc added 5.9 per cent after activist investor Bill Ackman's Pershing Square Holdings Ltd announced a 9.9 per cent stake in the restaurant chain, which is struggling to recover from a series of foodborne illnesses that began in the second half of 2015.

Tegna Inc rose 8.9 per cent amid plans to list auto-sales website Cars.com as a separate public company, and it's evaluating a sale of its CareerBuilder job-hunting unit.

BLOOMBERG