Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 1, 2017.- REUTERS
NEW YORK: The S&P 500 ended flat on Monday after briefly touching a record high, while Wall Street's "fear gauge" dropped to its lowest in over two decades following centrist Emmanuel Macron's victory in the French presidential election.
The CBOE Volatility index dropped 0.8 point to close at 9.77, its lowest since 1993 as investors took comfort from Macron's victory, as well as from strong quarterly reports in recent weeks.
A declining VIX typically indicates a bullish outlook for stocks, but the extreme lows the index has touched are sounding caution for some stock investors.
"It's been here before, but not much lower than this," said Donald Selkin, chief market strategist at Newbridge Securities in New York. "It's signaling that something negative is in the works."
Seven of the 11 major S&P sectors dipped, with the materials index down 0.91 percent and energy rising 0.7 percent on the back of higher oil prices.
The euro hit a six-month high against the dollar after Macron comfortably defeated far-right nationalist Marine Le Pen, who had threatened to take France out of the European Union.
"We remain largely constructive of the equity market and view that the path of least resistance is higher," said Bill Northey, chief investment officer at Private Client Group of U.S. Bank.
The Dow Jones Industrial Average edged up 0.03 percent to end at 21,012.28 points and the S&P 500 gained 0.08 points, less than a hundredth of a percent, to end at 2,399.37. It briefly touched a record high of 2,399.94.
The Nasdaq Composite added 0.03 percent to 6,102.66.
With March-quarter reporting season nearly complete, S&P 500 earnings on average have grown 14.4 percent, and earnings for the June quarter are expected on average to increase 8.6 percent, according to Thomson Reuters I/B/E/S.
Suggesting U.S. stocks remain expensive, the S&P 500 is trading at 17.8 times expected earnings, compared with its 10-year average of 14.2, according to Thomson Reuters Datastream.
After the bell, car rental company Hertz Global Holdings reported a deeper-than-expected quarterly loss and its stock slumped 15 percent.
Kate Spade jumped 8.31 percent during Monday's session after bigger rival Coach Inc said it would buy the handbag maker for $2.4 billion to increase its exposure to millennial shoppers. Coach shares rose 4.8 percent.
Straight Path surged nearly 33 percent after an unidentified telecommunications company raised its offer to buy the wireless spectrum holder for about $3.1 billion, trumping a bid by AT&T. Sources told Reuters that the bidder was Verizon.
Tyson Foods was the biggest S&P loser, down 6.08 percent after the meat processor reported a slump in quarterly profit.
Declining issues outnumbered advancing ones on the NYSE by a 1.23-to-1 ratio; on Nasdaq, a 1.22-to-1 ratio favored decliners.
The S&P 500 posted 44 new 52-week highs and 4 new lows; the Nasdaq Composite recorded 116 new highs and 58 new lows.
About 6.3 billion shares changed hands on U.S. exchanges, below the 6.6 billion daily average over the last 20 sessions
.In Europe the euro fell from a six-month high hit after pro-EU centrist Emmanuel Macron's victory in France's presidential election, as traders cashed in recent gains.
French shares underperformed other European markets after having hit on Friday their highest in more than 9 years.
The euro fell the most against the dollar since late March, having risen in overnight trade to just above $1.10 when opinion polls signalled the scale of Macron's victory over anti-euro nationalist Marine Le Pen.
World stocks, as measured by MSCI's 46-country world index, hit a record high and the main measure of Asia-Pacific shares excluding Japan rose 0.8 percent.
Shares resumed trading in Tokyo after a three-day market holiday. The Nikkei closed up 2.3 percent at a 17-month high.
The pan-European STOXX 600 index lost 0.13 percent while France's CAC 40 index fell 0.91 percent.
Emerging market stocks rose 0.70 percent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.82 percent higher.
In currency markets, the dollar index rose 0.53 percent, with the euro down 0.69 percent to $1.0919. The euro earlier touched a six-month high of $1.1024.
The Japanese yen weakened 0.46 percent versus the greenback at 113.28 per dollar, while sterling was last trading at $1.2934, down 0.35 percent on the day.
"A Macron win is largely priced into the euro," said Shaun Osborne, chief FX strategist at Scotiabank in Toronto. "Heavy trading in the spot market so far today suggests a modest unwind of the April and May rally is coming, at least."
Oil prices, which hit almost six-month lows last week on worries about a persistent global glut, edged up after OPEC hinted there could be an extension to current production cuts, which expire in June.
U.S. crude rose 0.54 percent to $46.47 per barrel and Brent was last at $49.39, up 0.59 percent on the day.
U.S. Treasury yields rose, with the benchmark yield at a five-week high in advance of the sale of $62 billion in bond supply at this week's quarterly refunding and following Macron's victory.
Benchmark 10-year Treasury notes were down 10/32 in price to yield 2.3868 percent, from 2.352 percent late on Friday.
Spot gold dropped 0.1 percent to $1,226.16 an ounce. U.S. gold futures fell 0.05 percent to $1,226.30 an ounce.
Copper lost 1.77 percent to $5,486.15 a tonne as Chinese trade data showed April imports of the metal dived 30 percent from March.
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