Stocks ease from record highs

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Stocks are drifting lower this morning as investors take profits following a string of gains.

S&P 500 futures are down 0.2 percent, while Europe is up by about the same margin. Asia was mixed overnight, with Shanghai and Seoul surging 1 percent while a stronger Japanese yen pulled the Nikkei down almost 1 percent.

The S&P 500 closed at yet-another record of 1951 yesterday and has climbed in 13 of the last 16 sessions. The breakout follows months of consolidation, during which the Russell 2000 small-cap index and Nasdaq 100 pulled back sharply. Both have rebounded as the broader market pushes higher.

Investors have bought equities as growth improves and interest rates remain low. Chinese prices rose slightly more than expected in May, offsetting worries of deflation on the mainland, and Goldman Sachs economist Jan Hatzius said yesterday that activity in the United States is growing at its quickest pace since the 2008 financial crisis. There are no more major economic headlines until Thursday.

Gains have been spread across the market as money streams into a broad range of stock: Biotechnology, commercial-property management, airlines, loan servicers and providers of network security. Our researchLAB market scanner also shows money flowing into foreign indexes such as Brazil, India, Russia, Turkey, and Spain.
 
In company-specific news, Achillion Pharmaceuticals rose 21 percent on news that regulators would let it resume clinical trials of its Sovaprevir Hepatitis C drug. The development comes one day after Merck's purchase of a similar company drove ACHN higher by 48 percent. RadioShack is down almost 18 percent after the debt-laden retailer's quarterly loss was wider than feared. Francesca's also dropped 10 percent on weak quarterly results. MetLife gained 2 percent after announcing a $1 billion stock buyback.

Commodities are mixed, with oil up about 0.2 percent and copper down about 0.3 percent. Precious metals are fractionally higher. Currencies paint a mildly cautious tone, with the euro lower and the safe-haven Japanese yen higher.


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