Stocks hold at record levels on Wall Street after a four-week rally
NEW YORK (AP) -- A stock market surge took a pause Monday after investors pushed indexes to record levels last week.
Investors will be watching the Federal Reserve this week for clues about what it plans to do next with its economic stimulus program. On Wednesday Federal Reserve Chairman Ben Bernanke will appear before Congress and the central bank will release minutes of its most recent policy meeting.
The Fed is buying $85 billion of bonds every month to keep long-term interest rates low. That has encouraged investors to put money into stocks instead of bonds.
Policy makers are unlikely to cut back on stimulus just yet since U.S. economic growth is likely to slow in the second quarter, said Scot Wren, a senior equity strategist at Wells Fargo Advisors. As a consequence, Wren said, stocks are likely to continue to rise.
"At some point, we will see some sort of a pullback, but it doesn't seem like it's going to be right now," said Wren. "In the near term we're probably going to trade a little bit higher."
On Monday, The Dow Jones industrial average fell 4 points, or 0.03 percent, to 15,350 as of 11 a.m. Eastern Daylight Time. The Standard & Poor's 500 index was little changed at 1,668.
In commodities trading, the price of crude oil fell 8 cents, or 0.1 percent, to $95.95 a barrel.
The price of gold continued to fall. The precious metal extended its streak of declines to eight days. The attraction of gold as an alternative investment has faded this year as the dollar has appreciated.
The U.S. currency is strengthening because investors believe the U.S. economy is in better shape than the Japanese or European economies.
The dollar's rally paused in early trading on Monday, though, and the U.S. currency fell against the euro and the yen. The dollar index also dropped, after climbing to its highest level in close to three years Friday.
In U.S. government bond trading, the yield on the 10-year Treasury note fell to 1.92 percent from 1.93 percent.
The Nasdaq composite index rose 2.2 points, or 0.06 percent, to 3,501 points.
Among stocks in focus on Monday:
- Actavis rose $3.81, or 3 percent, to $129.20 after pharmaceutical company said it's buying Warner Chilcott. The all-stock deal, valued at $8.5 billion, would create the third-biggest specialty pharmaceutical company in the U.S.
- Yahoo edged up 18 cents, or 0.7 percent, to $26.70 after the Internet company said it was buying online blogging forum Tumblr for $1.1 billion.