US Markets

Dow ekes out gain, closes higher as bank stocks offset tech losses

Key Points
  • Tech stocks were the biggest decliners on Monday, pulling the Nasdaq composite lower.
  • But a rise in bank stocks led the Dow and S&P to slight gains.
Bank stocks help offset losses in the tech sector

U.S. equities closed mixed on Monday as a rise in the financials sector helped offset losses from large-cap technology stocks.

The Dow Jones industrial average snapped a five-day losing streak, advancing about 15 points in choppy trade, with Goldman Sachs contributing the most gains. The 30-stock index briefly rose more than 100 points earlier in the session.

The S&P 500 closed flat, with utilities, telecommunications and financials leading advancers.

The Nasdaq composite lagged, ending 0.3 percent lower as Facebook, Amazon and Alphabet gave up initial gains to close lower.

Dave Lutz, head of ETF trading at JonesTrading, said tech was led lower by a fall in semiconductor stocks, including last year's best-performing S&P component Nvidia. The stock traded about 1 percent lower.

Technology stocks rebounded last week from a two-week swoon, rising 2.27 percent. The sector has been the stalwart of the U.S. stock market this year, advancing more than 20 percent.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City.
Brendan McDermid | Reuters

The Dow, S&P and Nasdaq opened Monday's session higher, with tech and bank stocks leading the charge.

Bank stocks rose after the Italian government said it reached a deal to wind up Popolare di Vicenza and Veneto Banca, two regional banks. The announcement lifted the Stoxx Europe 600 Banks index by about 0.9 percent, with U.S banks following.

"The fact that Italy is salvaging those two banks is a positive and that's partially why the market is higher," said Peter Cardillo, chief market economist at First Standard Financial."That removes one concern from the euro zone."

Shares of Morgan Stanley and JPMorgan Chase both rose, while the SPDR S&P Bank ETF (KBE) advanced 0.6 percent. U.S. big banks have been underperforming this year, with the KBE falling 3 percent in the period.

"The bailout of the Italian banks was very positive, in addition to the stress test results from U.S. banks," said Quincy Krosby, chief market strategist at Prudential Financial.

The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 9.7, breaking below 10 for the first time since June 9.

Wall Street also kept an eye on Washington as President Donald Trump was set to meet Indian Prime Minister Narendra Modi for the first time. The two leaders are expected to discuss immigration and a visa program that lets Indian IT talent work in the U.S.

In economic news, durable goods fell 1.1 percent in May, more than the expected 0.6 percent drop. The data pushed Treasury yields lower, with the 30-year bond yield breaking below 2.7 percent.

"I'm seeing more stories about the market with a negative tilt to them and I think they're echoing what investors are thinking," said Crit Thomas, global market strategist at Touchstone Investments. "We need more positive news to get the market going again."

Meanwhile, U.S. crude rose 0.86 percent to settle at $42.38 a barrel, but the relentless increase in U.S. supply and little evidence of a widespread drop in global inventories capped gains.

Oil fell 3.8 percent last week, marking its fifth straight week of losses. The drop weighed on energy stocks, which turned in their worst week since September 2016.

Major U.S. Indexes

The Dow Jones industrial average rose 14.79 points, or 0.07 percent, to close at 21,409.55, with Goldman Sachs leading advancers and Boeing the top decliner.

The gained 0.77 points, or 0.03 percent, to end at 2,439.07. with utilities leading seven sectors higher and information technology underperforming.

The Nasdaq fell 18.10 points, or 0.29 percent, to close at 6,247.15.

About two stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 794.81 million and a composite volume of 3.231 billion at the close.

—Reuters contributed to this report.