U.S. stocks advanced on Monday, with the Dow industrials coming back from a triple-digit deficit, as an upbeat read of the U.S. services sector countered concern about conflict in Ukraine and growth in China.
"We got the drop down as a reaction to a weaker overseas, but then ISM for non-manufacturing came out and investors decided things aren't that bad, that we're not heading into a recession, so maybe it's okay to buy stocks," said Paul Nolte, SVP and portfolio manager at Kingsview Asset Management in Chicago.
Pfizer, the pharmaceutical company that has been attempting to acquire Britain's AstraZeneca, declined after posting earnings that missed estimates. JPMorgan Chase also fell after the bank said late Friday it expects second-quarter revenue from bond and equity trading to drop by about 20 percent from a year ago.Target fell after news Chief Executive and Chairman Gregg Steinhafel would depart the discount retailer in the aftermath of the massive data breach late last year.
Stocks erased losses, with the Dow turning positive after a triple-digit drop, as the Institute for Supply Management's non-manufacturing index for March found the service sector growing at its fastest clip in eight months.
"Today's figure is further evidence of a spring rebound. Looking specifically at New Orders, it touched 58.1 in September, fell to 50.4 in December and is back to 58.2. Thus, this begs the question of whether we're just back to the prior trend or on the cusp of 3 percent-plus GDP growth in the 2nd half of 2014," noted Peter Boockvar, chief market analyst at the Lindsey Group.
"The stock market believes in the latter, the bond market says the former. We hope the stock market is right but remain in the camp of the bond market," added Boockvar.
The session started with equities sharply lower amid geopolitical concerns and gloomy data from China.
Recent reports from Ukraine had a Ukrainian military helicopter shot down over a rebelled-held Eastern town, with the pilots surviving, according to a statement from the Defenshade Ministry.
HSBC Holdings and Markit Economic's index of Chinese manufacturing contracted in April for a fourth straight month.