(Corrects second bullet point to show VIX at lowest since 1993,
not at 10-year low)
* S&P 500 briefly hits record intraday high
* VIX drops to lowest level since 1993
* Kate Spade rises on Coach's buyout offer
* Indexes end: Dow +0.03 pct, S&P flat, Nasdaq +0.03 pct
By Noel Randewich
May 8 The S&P 500 ended flat on Monday after
briefly touching a record high, while Wall Street's "fear gauge"
dropped to its lowest in over two decades following centrist
Emmanuel Macron's victory in the French presidential election.
The CBOE Volatility index dropped 7.6 percent to
9.77, its lowest since 1993 as investors took comfort from
Macron's victory, as well as from strong quarterly reports in
A declining VIX typically indicates a bullish outlook for
stocks, but the extreme lows the index has touched are sounding
caution for some stock investors.
"It's been here before, but not much lower than this," said
Donald Selkin, chief market strategist at Newbridge Securities
in New York. "It's signaling that something negative is in the
Seven of the 11 major S&P sectors dipped, with the materials
index down 0.91 percent and energy rising 0.7
percent on the back of higher oil prices.
The euro hit a six-month high against the dollar after
Macron comfortably defeated far-right nationalist Marine Le Pen,
who had threatened to take France out of the European Union.
"We remain largely constructive of the equity market and
view that the path of least resistance is higher," said Bill
Northey, chief investment officer at Private Client Group of
The Dow Jones Industrial Average edged up 0.03
percent to end at 21,012.28 points and the S&P 500 gained
0.08 points, less than a hundredth of a percent, to end at
2,399.37. It briefly touched a record high of 2,399.94.
The Nasdaq Composite added 0.03 percent to 6,102.66.
With March-quarter reporting season nearly complete, S&P 500
earnings on average have grown 14.4 percent, and earnings for
the June quarter are expected on average to increase 8.6
percent, according to Thomson Reuters I/B/E/S.
Suggesting U.S. stocks remain expensive, the S&P 500 is
trading at 17.8 times expected earnings, compared to its 10-year
average of 14.2, according to Thomson Reuters Datastream.
Shares of Kate Spade jumped 8.31 percent after
bigger rival Coach Inc said it would buy the handbag
maker for $2.4 billion to increase its exposure to millennial
shoppers. Coach shares rose 4.8 percent.
Straight Path surged nearly 33 percent after an
unnamed telecommunications company raised its offer to buy the
wireless spectrum holder for about $3.1 billion, trumping a bid
by AT&T. Sources told Reuters that the bidder was Verizon
Tyson Foods was the biggest S&P loser, down 6.08
percent after the meat processor reported a slump in quarterly
Declining issues outnumbered advancing ones on the NYSE by a
1.23-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.
The S&P 500 posted 44 new 52-week highs and 4 new lows; the
Nasdaq Composite recorded 116 new highs and 58 new lows.
About 6.3 billion shares changed hands in U.S. exchanges,
below the 6.6 billion daily average over the last 20 sessions.
(Additional reporting by Yashaswini Swamynathan in Bengaluru;
Editing by Nick Zieminski)