MARKET SNAPSHOT: U.S. Stocks Gain As Wall Street Tries To Erase Last Week's Ugly Loss

By Wallace Witkowski, MarketWatch , Ryan Vlastelica Features Dow Jones Newswires

Monday's equity trading has been marked by lighter-than-usual volume

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U.S. stocks on Monday tried to claw back from last week's sharp loss, as Wall Street's long-term uptrend appeared mostly intact, albeit, on weaker-than-average volume.

More pronounced gains from near-record levels, however, may be hard to achieve amid continued White House uncertainty.

The Dow Jones Industrial Average rose 89 points, or 0.4%, to 20,895, led higher by more than 1% gains in Cisco Systems Inc.(CSCO), Boeing Co.(BA) and 3M Co.(MMM)

The S&P 500 index rose 11 points to 2,392, a gain of 0.5%. The day's gains were broad-based, with 10 of the 11 primary S&P 500 sectors rising on the day. The industrials sector rose 0.6% as defense stocks advanced on an arms deal with Saudi Arabia, bested only by tech, up 0.8%, and utilities, up 0.9%.

The Nasdaq Composite Index rose 39 points, or 0.6%, at 6,122.

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All three benchmarks are coming off a weekly decline, but are on track to advance for three straight positive trading sessions since the market's sharpest decline in months last Wednesday.

With the bulk of earnings season over, investors will scrutinize U.S. political news, like the one last week that triggered a sharp midweek plunge for stocks (http://www.marketwatch.com/story/us-stock-futures-slide-as-concerns-over-trump-grow-2017-05-17). President Donald Trump traveled to the Middle East (http://www.marketwatch.com/story/trump-urges-muslims-to-fight-crisis-of-extremism-in-saudi-speech-2017-05-21) this weekend and delivered a speech with Israeli Prime Minister Benjamin Netanyahu on Monday.

Read:In the battle for control of the stock market, bulls may have an edge (http://www.marketwatch.com/story/stock-market-set-for-showdown-between-bulls-and-bears-2017-05-20)

That midweek dip was driven by reports that Trump asked then-Federal Bureau of Investigation Director James Comey to stop an investigation (http://www.marketwatch.com/story/trump-denies-asking-comey-to-drop-flynn-investigation-2017-05-18) into Russian meddling (http://www.marketwatch.com/story/white-house-official-probed-over-russia-and-president-called-comey-nut-job-reports-say-2017-05-19) into the U.S. election. And it has sown doubt that Trump will be able to push through a pro-economic-growth agenda seen as driving recent gains for stocks.

It isn't taking much to push around stocks Monday with volumes being extremely low, said Sahak Manuelian, managing director of equity trading, in an interview.

"Volumes are terrible across the board," Manuelian said. "I think there's just a lack of market participation within this rally."

At last check, composite volume on the New York Stock Exchange was just over 1.67 billion shares, and about 956 million shares on the Nasdaq, with less than three hours of trading left in the session. Average daily trading volume for the year to date has been 3.53 billion shares on the NYSE, and 1.86 billion shares on the Nasdaq, according to Dow Jones data.

Investors will this week try to whether that selloff was temporary or a "signal of something more sinister," said Michael Stanes, investment director at Heartwood Investment Management, in a note Monday.

Read:This chart shows how stocks aren't breaking down--but not breaking out, either (http://www.marketwatch.com/story/this-chart-shows-how-stocks-arent-breaking-down-but-not-breaking-out-either-2017-05-22)

He argued, though, that gains for stocks after the presidential election are also due to improved global economic conditions and fading disinflationary effects that started in summer 2016. The fundamental backdrop hasn't changed, with the U.S. economy still on a solid footing and other global economies steady, said Stanes.

"We recognize that we are in the latter part of the market cycle and sentiment is likely to remain vulnerable to pressure points as we move through the year," he said.

Read:White House to roll out budget proposal, cutting Medicaid, assistance to the poor (http://www.marketwatch.com/story/white-house-to-roll-out-budget-proposal-cutting-medicaid-assistance-to-the-poor-2017-05-22)

Fed speakers ahead: On a quiet day for data, the Chicago national activity index was at a three-year high (http://www.marketwatch.com/story/chicago-feds-national-economic-measure-at-multimonth-high-with-housing-its-only-drag-2017-05-22) of 0.49 in April, compared with 0.07 in March.

Read:Buoyant U.S. economy rides out rough political sea, but more storms ahead (http://www.marketwatch.com/story/buoyant-us-economy-rides-out-rough-political-sea-but-more-storms-ahead-2017-05-21)

Two Fed speakers are lined up to speak after the market closes on Monday. Fed Gov. Lael Brainard speaks on "the roles of opportunity and inclusion in strengthening the U.S. economy" in Minneapolis at 7:30 p.m. Eastern. Then Chicago Fed President Charles Evans gives a speech on the economy at an OTC derivatives conference in Shanghai, China, at 9:10 p.m. Eastern.

Stock movers: Shares of Huntsman Corp.(HUN) fell 0.7%, reversing an earlier advance that came on news it will merge with Switzerland's Clariant AG (CLN.EB), creating a chemicals giant worth about $14 billion. Under terms of the deal announced Monday (http://www.marketwatch.com/story/huntsman-clariant-to-combine-into-20-bln-company-2017-05-22), Clariant shareholders will own 52% of the new entity and Huntsman will own the rest.

Ford Motor Co.(F) shares were up 1.9% on news the auto maker plans to replace Chief Executive Officer Mark Fields with Jim Hackett (http://www.marketwatch.com/story/ford-to-replace-ceo-mark-fields-with-jim-hackett-amid-pressure-on-profit-2017-05-22), a Ford executive who leads a unit that works on autonomous cars.

Companies in the defense sector rose after Saudi Arabia and other Gulf states signed arms deals worth $350 billion (http://www.marketwatch.com/story/defense-stocks-rise-across-the-board-premarket-after-trump-signs-350-billion-of-arms-deals-2017-05-22) with the U.S. over the weekend. Lockheed Martin Corp. (LMT) rose 1.3% while Raytheon Corp. (RTN) added 0.3%. The iShares U.S. Aerospace & Defense ETF(ITA) rose 1%.

Other markets: Asian stocks were largely higher, outside of a 0.4% dip for the Shanghai . In Europe, stocks finished lower with the Stoxx Europe 600 index down 0.1%.

Read:Miners, oil share lead the FTSE 100 higher (http://www.marketwatch.com/story/miners-oil-shares-lead-the-ftse-100-higher-2017-05-22)

(http://www.marketwatch.com/story/miners-oil-shares-lead-the-ftse-100-higher-2017-05-22)The dollar erased some gains from earlier, specifically against the euro after German Chancellor Angela Merkel reportedly said because of European Central Bank policies, the weaker euro has made German products cheaper (http://www.marketwatch.com/story/pound-declines-after-shift-in-uk-election-polls-euro-climbs-2017-05-22).

Read: This is the 'bad' kind of dollar weakness (http://www.marketwatch.com/story/this-is-the-bad-kind-of-dollar-weakness-2017-05-22)

Gold prices made modest gains (http://www.marketwatch.com/story/gold-keeps-rally-going-as-dollar-eases-stocks-churn-2017-05-22). West Texas Intermediate oil prices were climbing ahead of a meeting (http://www.marketwatch.com/story/oil-prices-climb-as-investors-wait-for-opec-meeting-2017-05-22) later this week of the Organization of the Petroleum Exporting Countries.

Read:4 potential outcomes for OPEC's crucial meeting (http://www.marketwatch.com/story/4-potential-outcomes-for-opecs-crucial-meeting-2017-05-19)

--Barbara Kollmeyer in Madrid contributed to this article

(END) Dow Jones Newswires

May 22, 2017 14:03 ET (18:03 GMT)