The Nasdaq closed lower to end eight straight days of gains on Monday as some large-cap tech stocks slid in a late-day sell-off.
The Dow cut its gains and the S&P 500 ended a thinly traded session flat as optimism faded over China’s move to tame its growth, and as some technical indicators suggested a near-term pullback could be on the cards.
About 7,32 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, well below the year’s daily average of 8,62 billion.
Stocks earlier had risen as optimism China would not aggressively head off growth boosted energy and materials stocks.
Companies that sell oil, like Chevron Corp, and those that make mining equipment, like Caterpillar Inc, drove the Dow higher. At the close, both Caterpillar and Chevron were up 1,5% or more. The PHLX oil service index. OSX rose 1,3%.
Investors had feared China would raise interest rates to slow growth, but instead it merely increased the amount of extra capital top banks must hold, a less severe move by the world’s second-largest economy.
“Even though China isn’t fuelling us 100%, if it was to tighten, that would mean less strength in a weak recovery here,” said Jeffrey Friedman, senior market strategist at Lind-Waldock in Chicago.
The Dow Jones industrial average gained 18,24 points, or 0,16%, to end at 11 428,56, well off its intraday high of 11 480,03. The Standard and Poor’s 500 Index. SPX inched up a mere 0,06 of a point, or 0,00%, to finish at 1 240,46. But the Nasdaq Composite Index. IXIC fell 12,63 points, or 0,48%, to close at 2 624,91.
The S&P 500 reached another high for the year on Monday, advancing to an intraday peak at 1 246,73. The index’s steady climb since breaching 1 228, a key retracement of the 2007-2009 bear market losses, has been judged a sign of further gains, even as the relative strength index suggests stocks are nearing an overbought condition.
The Nasdaq ended the day solidly lower as some tech names, including Apple Inc and EMC Corp, traded off highs reached earlier in the session.
Apple rose more than 1% in afternoon trading, but at the close, it was up just 0,4% at $321,67. The stock is up 53% so far this year.
“We’ve definitely seen a lot of strength in large-cap tech recently, and they took a bit of a pause in the afternoon with people winding down at the end of the day,” said Timothy Harder, chief investment officer at Peak Capital Investment Services in Denver.
“There wasn’t much to spur trading, and in the absence of any real news and light volume, there wasn’t much to keep us up.”
Healthcare stocks had jumped briefly on news that a Virginia judge invalidated a key part of the March healthcare overhaul championed by President Obama, but these shares quickly fell back. After rising as much as 1,6%, the Morgan Stanley Healthcare Payor Index. HMO slipped 0,3%. Shares of health insurer Aetna rose 1% to $30,92.
In deal news, General Electric (GE) Company said it would buy British oilfield services company Wellstream Holdings Plc while Dell Inc agreed to buy data storage company Compellent Technologies Inc.
GE’s stock shed 0,6% to $17,62 after reaching a deal to buy Wellstream by raising its bid for the British oil drilling pipe maker by 6% to $1,3 billion.