U.S. stocks on Monday managed to end mildly up for a second session as unease over escalating unrest in Iraq curbed enthusiasm over upbeat economic reports and activity on the corporate deal-making front.
"The good news is the economic backdrop continues to be positive, so that mitigates some of the headlines and uncertainties coming out of the Middle East, at least for today," said Jim Dunigan, managing executive, investments at PNC Wealth Management.
Monday's economic data had the New York Federal Reserve's Empire State index of business conditions in June rising to its best reading since June 2010; industrial production for May up 0.6 percent and a gauge of builder sentiment jumping in June.
The Iraqi government is trying to fend off Sunni Islamist insurgents who took control of the north of the nation during the past week, with U.S. Secretary of State John Kerry saying in an interview with Yahoo! News that the White House is willing to talk to Iran over the deteriorating security conditions in Iraq.
"There are no easy answers there; the market will wait to see if it's going to get more volatile and require some action by the U.S.; if we get drawn in in some way, that's going to continue to cause concern," Dunigan said.
Oil prices trimmed an early rise after Bank of America called "highly unlikely" the utter halt of Iraqi production of crude, with output concentrated in the southern side of Iraq.
U.S. dependence on crude from the Middle East is "thankfully a lot less of an issue than a couple of years ago, before advances in oil and gas production domestically. Prices may not reflect that, but our dependence is less," noted Dunigan.
Investors also monitored geopolitical unease in Ukraine after Russian natural gas exporter Gazprom reduced supplies to Ukraine after the Ukrainian government did not meet a deadline to pay its gas debts in discord that could hinder gas exports to Europe.