* VIX down, volatility expected to remain low
* Banks lead gainers, continue winning streak
* Dow off 0.02 pct, S&P up 0.4, Nasdaq up 0.3 pct
* For up-to-the-minute market news see []
(Updates to close, changes byline)
By Chuck Mikolajczak
NEW YORK, Dec 9 (Reuters) - U.S. stocks edged up on
Thursday, with the benchmark S&P 500 index hovering around
two-year highs, a trend investors expect to continue through
the rest of the year.
"A lot of traders thought the market would have a little
bigger bump" after breaking a key technical level of 1,228 on
the S&P, said Alan Valdes, director of floor trading for DME
Securities in New York.
"What we have seen today is trading in a small band. They
take it up to 1228 (but) they are not really going through it
big time and we are seeing some profit-taking going on."
Investors loaded up on bank stocks, which have risen 12.4
percent for the month. Late in the year, winning positions
often attract buyers seeking to improve fund performance in a
practice known as window dressing. The KBW Bank Index <.BKX>
gained 2.2 percent, boosted by a 5.4 percent rise in Bank of
America Corp <BAC.N> to $12.65.
The Nasdaq finished higher for the seventh straight day and
closed at its highest level since December 2007, paced by a 6.8
percent jump in Teva Pharmaceutical Industries <TEVA.O> to
$52.63 after the drugmaker said it expects its experimental
multiple sclerosis pill will win U.S. approval within two years
after a clinical trial met its main goal. For details, see
[]
Expectations of reduced volatility suggest a steady climb
through the rest of the year. The CBOE Volatility Index VIX
<.VIX>, a barometer of Wall Street anxiety, fell more than 2
percent to 17.25. The VIX usually moves inversely to the
benchmark S&P index.
The VIX closed under 18 for two straight days, and MKM
derivatives strategist Jim Strugger said it is considered to be
the start of a sustained period below its long-term average of
just above 20.
The Dow Jones industrial average <> dipped 2.42 points,
or 0.02 percent, to 11,370.06. The Standard & Poor's 500 Index
<.SPX> gained 4.72 points, or 0.38 percent, to 1,233.00. The
Nasdaq Composite Index <> rose 7.51 points, or 0.29
percent, to 2,616.67.
The Dow was pressured by major manufacturer DuPont <DD.N>
after it gave its outlook for 2011. DuPont slipped 1.1 percent
to $48.32. []
A tentative agreement with congressional Republicans to
extend tax breaks announced by President Barack Obama hit
opposition from prominent Democrats. Wall Street wants the tax
breaks to boost returns and spur growth, but news of the
Democratic squabbling failed to rattle investors.
The S&P 500 closed above 1,228, a resistance level that
represents the 61.8 percent Fibonacci retracement of the
2007-2009 bear market slide, which has proven difficult for the
index to stay above in recent sessions.
A Labor Department report showed first-time claims for
jobless benefits fell more than expected last week, which
investors saw as positive after last week's disappointing
payrolls figures. []
Volume was a light 7.7 billion shares traded on the New
York Stock Exchange, the American Stock Exchange and Nasdaq,
compared with last year's estimated daily average of 8.63
billion.
Advancing stocks handily outnumbered declining ones on the
NYSE by 1,673 to 1,336, while on the Nasdaq, advancers beat
decliners 1,528 to 1,069.
(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)
