Not So Fast: S&P 500 Touches Record Highs, Then Pulls Back
NEW YORK ( TheStreet) -- Stocks closed short of record highs Monday as investors weighed China's announcements to pursue economic reforms in its banking sector and ease its decades-old one-child policy.
The list of potential reforms promises to be the country's most sweeping changes toward a market-based economy since the 1990s. The proposals cover legal reforms, expanding land rights for farmers as well as the management of state-owned enterprises. The apparent goal is to improve the functioning of state-owned enterprises by encouraging private-sector innovation.
News of the reforms pushed the Dow Jones Industrial Average above 16,000 for the first time ever at nearly the same moment as the S&P 500 attained a previously untouched 1,800 level.
On the NYSE, CRM shares shed 3.1% to $55.51 despite an announcement from the cloud computing giant of a revamped mobile platform , Salesforce1, to keep its existing customers happy. The function will be accessible to existing customers through a free upgrade, allowing them to pool together all of Salesforce.com's offerings and features into customizable mobile and social apps. The platform allows easier mobile access to third party applications from Dropbox, LinkedIn
The announcement coincides with salesforce.com's third-quarter earnings announcement after the market close. The company reported earnings of 9 cents a share on revenue of $1.08 billion. Wall Street expected earnings of 9 cents a share on revenue of $1.06 billion, according to a survey of analysts by Thomson Reuters.
Chinese stocks listed on the NYSE were generally moving higher. China Eastern Airlines
"Although we are impressed by the wide-ranging statement of intentions (on Chinese reforms) we are not convinced that there will be a sharp upward trend in stock prices," Capital Economics global economist Jessica Hinds said in a note on Monday.
Major U.S markets reached new record highs Friday on expectations Federal Reserve Vice Chair Janet Yellen, tipped to be the next central bank chief, will maintain current monetary policy until economic data shows solid improvement. Tepid industrial production data today reinforced a mixed-economic outlook.
Investors will be able to tap into further clues on the Fed's stimulus timeline throughout the week.
The National Association of Home Builders Housing Market Index remained steady at 54 in November, against expectations for a result of 55.