Shares of utility companies and other dividend-paying stocks led the S&P 500 to a slim gain following some tepid U.S. economic data.
As investors turned to more defensive stocks that tend to offer steady income, they dialed back on the year's biggest gainer, the technology sector.
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Overall moves were relatively muted. The Dow Jones Industrial Average snapped a four-day losing streak, gaining 14.79 points, or less than 0.1%, to 21409.55. The S&P 500 gained 0.77 points, or less than 0.1%, to 2439.07. The tech-heavy Nasdaq Composite shed 18.10 points, or 0.3%, to 6247.15.
U.S. government bond prices and their stock-market proxies rose after data from the Commerce Department showed demand for long-lasting factory goods declined in May for the second-straight month.
Utilities shares in the S&P 500 rose 0.8%, while telecommunications, real estate and consumer-staples stocks also gained.
Recent inflation figures have been lackluster, raising concerns that further disappointing data could damp U.S. growth and change the Federal Reserve's outlook for raising interest rates this year and next, some analysts said.
"You wouldn't be buying utilities stocks if you thought that rates were going to rise significantly," said John Serrapere, director of research for Arrow Funds.
As U.S. government bonds strengthened, the yield on the 10-year Treasury note fell for the third straight session, slipping to 2.135% from 2.146% Friday. Signs that inflation has softened have pushed down bond yields in recent weeks.
Bank shares rose after Italian authorities said Sunday they were prepared to spend as much as EUR17 billion ($19.03 billion) as part of the shutdown of two regional banks.
The KBW Nasdaq Bank index of large U.S. commercial lenders rose 0.7% and the Stoxx Europe 600 banks subindex gained 0.9%. The Stoxx Europe 600 rose 0.4%.
Italian banks have been a concern for years, weighed down by bad loans, low profitability and insufficient capital. Their troubles have cast a shadow over the wider European banking system, which accounts for a large chunk of regional equity benchmarks.
"It is a very significant step," said Isabelle Mateos y Lago, chief multiasset strategist at BlackRock.
"If finally the issue of [bad loans in] the Italian banking system and overcapacity in some of the regional banks is being addressed, it is a very positive signal," she added.
Shares in Intesa Sanpaolo, which is set to buy the best assets of two troubled Italian lenders for a token fee, rose 3.5% in European trading. Shares in Italy's largest lender, UniCredit, gained 2.2%.
Elsewhere in Europe, food and beverage shares rallied following news that billionaire activist investor Daniel Loeb's Third Point hedge fund had taken a $3.5 billion stake in Nestlé. Shares in Nestlé added 4.3%.
In Asia, the Shanghai Composite Index rose 0.9%, with Chinese stocks continuing to perform strongly following MSCI's decision to add them to its indexes. Gains there also helped boost Hong Kong equities on Monday. The Hang Seng Index rose 0.8%.
In Japan, the Nikkei Stock Average rose 0.1%, with financial stocks weighing on the broader index. Signs that interest rates will remain low continue to weigh on Japanese financials, said Hisao Matsuura, chief strategist for equities at Nomura Japan.
Write to Christopher Whittall at email@example.com and Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
June 26, 2017 17:04 ET (21:04 GMT)