Arconic tops S&P 500 losers
U.S. stocks struggled to build on moderate gains Monday as the technology sector flirted with negative territory and shares of prominent tech firms lost ground.
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The Dow Jones Industrial Average rose 42 points, or 0.2%, to 21,435. The Nasdaq Composite Index was flat, down less than a point to 6,265 as Apple Inc.(AAPL) dipped into the red and Facebook Inc.(FB) and Alphabet Inc.(GOOGL) headed south.
The S&P 500 was up 4 points, or 0.2%, to 2,442, with so-called defensive sectors, such as utilities and telecoms leading. The technology sector, which was trading up 0.7% in early trade, reversed course to fall 0.2%.
The benchmark S&P 500 is up about 9% in the first half of the year, with some analysts suggesting that the second half will likely be positive as well.
"When the 500's first-half price gain was between 7% and 12%...the market went on to record an average price rise of 5.1% during the second half and posted a positive performance an above-average 87% of the time," wrote Sam Stovall, chief investment strategist at CFRA, a market research firm.
Stovall's calculations would put the S&P 500 at 2,565 by the end of 2017.
"While this forward six-month level for the S&P 500 approximates our 12-month target, based on current EPS and inflation projections, history implies that we may be underestimating the market's rest-of-year potential," Stovall said.
Volatile moves in crude-oil prices earlier also contributed to dampening appetite for stocks.
"Oil is the primary culprit in markets paring gains this morning. We are in a state where the market is playing a game: on the one hand investors like stocks because there are no alternatives with bond yields so low, but they are also concerned about the economy. Every time oil sells off, fears about demand and deflation resurface," said Ian Winer, director of equity trading at Wedbush Securities.
Read:Want to know where the stock market's headed over next 6 months? Don't ask OPEC (http://www.marketwatch.com/story/want-to-know-where-the-stock-markets-headed-over-the-next-6-months-dont-ask-opec-2017-06-24)
Stock movers:Facebook (FB) turned 0.1% lower after gaining on news that the social-networking giant is talking to Hollywood studios and agencies about producing TV-quality shows (http://www.marketwatch.com/story/facebook-in-talks-with-hollywood-to-produce-tv-quality-shows-2017-06-26), according to people familiar with the talks.
U.S.-listed shares of Nestlé SA(NESN.EB) jumped 3.9% following news that billionaire activist investor Daniel Loeb's Third Point LLC hedge fund has taken a $3.5 billion stake in the consumer-products giant (http://www.marketwatch.com/story/daniel-loebs-hedge-fund-takes-35b-nestle-stake-2017-06-25).
Arconic Inc.(ARNC) shares sank 4.2%, topping the losers on the S&P 500. The company said it will halt sales of one type of aluminum cladding (http://www.marketwatch.com/story/arconic-stops-selling-cladding-panels-involved-in-london-tower-fire-2017-06-26) for use in high-rise buildings after 79 people died in a fire at the Grenfell Tower in London. The material was suspected to have partly contributed to the spread of the inferno.
Shares of Yum Brands Inc.(YUM) were fractionally higher after Australian company Collins Foods Ltd. (CKF.AU) said it is buying 28 KFC restaurants from the fast food-chain operator (http://www.marketwatch.com/story/yum-brands-rises-18-premarket-after-sale-of-28-kfc-outlets-to-collins-foods-2017-06-26).
Economic news: Weaker-than-expected durable-goods orders had a muted impact on equities, though both the dollar and Treasury yields weakened after the release. Durable-goods orders (http://www.marketwatch.com/story/orders-for-durable-goods-backslide-again-2017-06-26) slipped 1.1% last month following a similar drop in April, disappointing economists who expected a smaller decline.
"After vast improvement at the start of the year, manufacturers have recorded fewer than expected durable goods orders for the second consecutive month," said Lindsey Piegza, chief economist at Stifel Fixed Income, in a note. "Short-lived optimism, no doubt, from pro-growth policies ushered in by the Trump administration have been replaced by a more lackluster reality of a little improved domestic growth and consumption profile."
The Chicago Fed national activity index fell to negative 0.26 in May from 0.57 in April.
See: MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic).
A quarterly mortgage sentiment survey from Fannie Mae showed U.S. lenders are preparing for tougher times ahead and planning to relax lending standards, according to Reuters.
In central bank news, San Francisco Fed President John Williams said at a speech in Australia that gradual hikes in interest rates are needed to avoid overheating the U.S. economy (http://www.marketwatch.com/story/feds-williams-says-gradual-rate-hikes-are-needed-for-growth-2017-0). Separately at Salzburg in Austria, Fed governor Jerome Powell said he sees room to ease some banking rules in the U.S (http://www.marketwatch.com/story/feds-powell-reiterates-his-call-for-relaxing-some-banking-regulations-2017-06-26).
Other markets: The dollar was up slightly against peers while the yield on the 10-year Treasury note fell to 2.12%. Meanwhile gold stumbled 1%.
Asian stock markets closed higher (http://www.marketwatch.com/story/asian-markets-gain-thanks-to-tech-stocks-and-commodities-2017-06-25) across the board, serving as a tailwind for European stocks (http://www.marketwatch.com/story/european-stocks-propelled-higher-by-italian-banks-nestle-shares-2017-06-26).
--Sara Sjolin contributed to this report.
(END) Dow Jones Newswires
June 26, 2017 13:10 ET (17:10 GMT)