May 28 - Summary: Yields on the 10-year note hit an 11-month low of 2.44 percent; Stocks slip; Apple buys Beats for $3 billion; Kors and Toll top forecasts. Twitter soars on upgrade. Conway G. Gittens reports.
The S&P 500 tried but failed to set a third closing record in a row. Sellers came out into the close but moves were small without any major economic news to sway investors. Moves, however, a big theme in the bond market, where prices moved up and yields on the 10-year note moved down. Yields on the benchmark used to set mortgage rates and other lending rates hit 2.44 percent, a low not seen in almost a year. BNY Mellon's Michael Woolfolk says the market is now projecting lower inflation. SOUNDBITE: MICHAEL WOOLFOLK, GLOBAL MARKETS STRATEGIST, BNY MELLON (ENGLISH) SAYING: "We now believe that low inflation is likely to persist for longer than earlier anticipated. Why is this important? The, what's called the terminal rate for the Fed Funds target, so once the Fed gets done normalizing interest rates - where is the maximum level is going to be? The market was maybe at the beginning of the year, maybe around four percent in four or five years, we may be below three percent now, so that is obviously going to boost prices and keep yields low." That also kept gold prices moving to the downside. Gold hitting a fresh 3-1/2 month low. The Apple purchase of Beats Electronics is official. Apple is paying $3 billion, which is less than the $3.2 billion rumored 2-1/2 weeks ago. This is still Apple's biggest acquisition. Wall Street now sees Twitter as a niche player in the social media world and has priced the stock accordingly. That's the takeaway from Nomura Securities, which upgraded the stock to a "buy". The stock surged nearly 11 percent after the upgrade. Google is taking its self-driving car for a very public test drive. The micro electric car has no steering wheel, accelerator pedal or brake pedal and runs via laser sensors and radars used in traditional vehicles. Google has been testing the driverless car since 2009. On the earnings front: Profits more than doubled at Toll Brothers. The largest luxury homebuilder sold more homes with higher price tags last quarter. Shares rallied more than two percent on better-than-expected sales and profits. Michael Kors continues to be the golden child on Wall Street and Main Street. Quarterly sales have surged by at least 40 percent in every quarter since the fashion house went public back in 2011. Shares of Kors - up for the day - and up nearly 20 percent so far this year. In Europe, General Electric CEO Jeff Immelt was in France making a harder push to buy Alstom by offering to create 1,000 new engineering and manufacturing jobs in Paris, within three years, according to sources. As for markets: Stocks in Germany, France and the U.K. were basically flat.