By Nikolaj Gammeltoft and Amanda Gould
NEW YORK - Most U.S. stocks fell, after the Standard & Poor’s 500 Index climbed to the highest level since 2007, as FedEx Corp. slumped and concern grew that European leaders will struggle to resolve the region’s debt crisis.
FedEx dropped 3.1 percent as it reduced its profit outlook after quarterly earnings fell. United Continental Holdings Inc. fell 2.3 percent amid a U.S. investigation of tarmac delays. Advanced Micro Devices Inc. dropped 9.7 percent after announcing its chief financial officer will resign. Apple Inc. closed above $700 for the first time.
The S&P 500 slid 0.1 percent to 1,459.32 at 4 p.m. in New York. The Dow Jones Industrial Average rose 11.54 points, or 0.1 percent, to 13,564.64. About five stocks fell for every four advancing on U.S. exchanges today, as 6 billion shares traded hands, in line with the three-month average.
“We’re looking for the market to flatten out and hold where it is until the U.S. election,” Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust, which oversees about $13 billion, said in a telephone interview. “Europe is an overhang that’s still there on the U.S. market. Their debt crisis is not being handled, it’s Band-Aids here and there. It’s slowing us down.”
The S&P 500 is trading at 14.1 times the estimated earnings of its constituent members, close to its highest price multiple since the end of 2010, data compiled by Bloomberg show. The equity benchmark rose to its highest level since December 2007 on Sept. 14 after the Federal Reserve said it will buy mortgage securities to support economic growth. Bearish options contracts on the S&P 500 have dropped to the cheapest level in more than three years.
The S&P 500 fell 0.3 percent yesterday after a meeting of European Union finance ministers in Cyprus on Sept. 14 and 15 failed to agree on a timetable for a more unified banking industry, the terms of bailout requests and the role played by the European Central Bank.
ECB Governing Council member Luc Coene said Spain may have to ask the European Commission for aid and submit to conditions imposed by its creditors if bond yields continue to increase. Coene spoke at a panel discussion in London yesterday.
The Spanish government sold 4.6 billion euros of bills at an auction today, more than its maximum target. Spain’s bond yields climbed to more than 6 percent yesterday for the first time since Sept. 7, the day after policy makers approved ECB President Mario Draghi’s plan to buy government debt to ensure the transmission of interest rates.