May 13 - Summary: Another record day for stocks; PIMCO's new neutral note; Retail sales disappoint; AT&T in talks to buy DirecTV-sources. Bobbi Rebell reports.
The S&P 500 passed the 1900 mark for the first time on Tuesday- hitting a new record high along with the Dow. But the Nasdaq, closing in the red, pulling back after recent gains. Wells Fargo's Bryant VanCronkhite: SOUNDBITE: BRYANT VANCRONKHITE, PORTFOLIO MANAGER, WELLS FARGO ADVANTAGE FUNDS (ENGLISH) SAYING: "On the surface everything seems relatively calm. The markets are reaching new highs as you mentioned. But underneath the water there is a lot of volatility taking place. There is a shift from growth to value and the earnings season has been relatively mixed. So we are seeing a lot of volatility in individual names so it's been a very unique situation with a lot of moving parts." European markets also rose- upbeat corporate results and a report that Germany's central bank is ready to back new stimulus measures from the ECB, helping to lift stocks. Bond fund giant PIMCO though- expressing concerns about the bull market in its three-five year outlook. In a report released on the firm's website, titled "The New Neutral" PIMCO said that neutral policy interest rates suggest an end to bull markets as we've known them- and sees low returns yet less downside risk than investors currently expect. Scott Mather is PIMCO'S Deputy Chief Investment Officer: SOUNDBITE: SCOTT MATHER, DEPUTY CHIEF INVESTMENT OFFICER, PIMCO (ENGLISH) SAYING: "Returns going forward are going to be lower given how much we have repriced already. So we talk about bond, high quality bonds delivering something like three percent sorts of returns and equities maybe something better like five percent. So you know that is low by recent historical standards but of course if you look back over a much longer period of time a multi decade period of time it is not particularly abnormal." Retail sales fell short of forecasts- up just one tenth of a percent. Consumers spent less on things like furniture, electronics and appliances. AT&T is in active talks to buy satellite TV provider DirecTV- sources tell Reuters. A deal could be complete within the next few weeks- and could be worth close to $50 billion. Take Two Interactive earnings beat forecasts, but shares of the company behind Grand Theft Auto fell in after hours trading- revenue dropped 23 percent in its fiscal fourth quarter. Operating profits doubled at Canada's largest natural gas producer Encana, thanks to higher gas prices and liquids production. Getting a mortgage could get easier. The head of the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, laid out new policies that will make it easier for many Americans to get mortgages. For example- holding off on lowering the size of loans they could buy. Shares of both Fannie Mae and Freddie Mac both rose on the news.