Wall St dips after S&P 500 hits four-year high

S&P 500 index hit 1,426.68, its highest intraday reading since May 2008

U.S. stocks dipped on Tuesday after the S&P 500 hit its highest level in four years, with some expecting the recent lull to continue through the week.

The S&P 500 index hit 1,426.68, its highest intraday reading since May 2008, after rising for the last six weeks. Volume has been light, as expected in late August, and only two of the last 12 sessions have seen moves of 0.25 percent or more on the S&P.

The euro rallied to a seven-week high against the U.S. dollar bolstered by talk that the European Central Bank will take action to ease Spanish and Italian borrowing costs. Bets on action from world central banks including the ECB in support of their stalling economies have helped move stocks higher.

 

In the United States, a recent batch of slightly better-than-expected data including payrolls, retail sales and various housing sector numbers countered a previous string of disappointments and also contributed to the market's upward drift of late.

"The U.S. economy is showing signs of picking up again," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis, of the catalyst behind the four-year high on the S&P 500.

Still, he said major indexes will likely stall until the end of the month. He sees equities "teetering around this high until September, then we decide if the market is indeed making a move higher or if it's going to fail."

The Dow Jones industrial average fell 49.87 points, or 0.38 percent, to 13,221.77. The S&P 500 Index dipped 3.39 points, or 0.24 percent, to 1,414.74. The Nasdaq Composite Index lost 7.93 points, or 0.26 percent, to 3,068.28.

The CBOE Volatility Index or VIX, Wall Street's fear barometer, rose 6.6 percent to 14.95, still near the five-year low of 13.30 hit last week.

Technology stocks were the day's underperformers.

Facebook Inc director Peter Thiel sold roughly $400 million worth of shares in the online social networking company last week, cashing out most of his stake. The sale comes as Facebook's stock lost 50 percent of its value since its IPO earlier this year. In Tuesday's session, Facebook shares fell 4.1 percent to $19.19.

Best Buy Co shares pared losses in afternoon trading after hitting an almost 10-year low of $16.25 earlier in the day. The company suspended its profit outlook and share buybacks for the year. Shares were down 0.7 percent at $18.04.

Shares of clothing retailer Urban Outfitters rose 18.3 percent to $37 after several brokerages raised their price targets on the stock.