Wall Street pared gains on Monday after a strong morning rally driven by lower oil prices and more positive news from the Middle East fizzled out.
All the major indices had been up by at least 1 per cent on the day but began trading lower in mid-afternoon to finish only modestly higher.
Ceasefire news dragged crude prices and energy sector stocks lower. Of the 10 worst performing stocks in the S&P 500, six were in the sector. ConocoPhillips sank 2.3 per cent to $66.82, while Valero Energy lost 2.4 per cent to $63.24.
Airline stocks, however, were among the beneficiaries. JetBlue Airways added 2.3 per cent to $10.06 and American Airlines’ parent AMR gained 2.3 per cent to $19.26.
At the close, the S&P 500 was up 0.1 per cent, or 1.47 points, at 1,268.21. The Nasdaq Composite had gained 0.6 per cent, or 11.33 points, at 2,069.04. The Dow Jones Industrial Average was flat, up 9.84 points at 11,097.87.
Chris Johnson, director of quantitative analysis at Schaeffer’s Investment Research, said the afternoon fall was caused by traders closing positions ahead of the release of the Producer Price Index (PPI) on Tuesday.
“What we’re seeing is traders taking any opportunity to bag a profit, even if it’s on a one-day move, especially if it’s in front of a PPI number,” he said.
Caterpillar was one of the most whipsawed stocks of the day. It climbed as high as 2.4 per cent, only to turn lower, and close down 1.6 per cent to $65.96.
Technology stocks staged a rally. Intel ticked up 2.6 per cent to $17.87. Software-maker Oracle rose 2 per cent to $15.29 after it said it was increasing its stake in Indian software company I-flex.
Networking equipment maker Cisco Systems gained following bullish comments in Barron’s, the weekly investment magazine, which said the company would benefit from telecommunications companies upgrading their networks. Its shares added 2.8 per cent to $20.09. Juniper Networks also gained, adding 2 per cent to $12.44.
Ford Motor gained 6.2 per cent to $7.83 after the stock was upgraded from “underperform” to “outperform” by Bear Stearns. Ford has gained 25 per cent in the past three weeks.
SunTrust Banks tumbled 3.8 per cent to $76.55, its worst single-day loss since May 2004. The fall came after it lowered its full-year forecast for net interest income growth due to rising competition and interest rate pressures. The bank said credit losses could rise due to a $200m non-performing loan.
Dillard’s, the department store, jumped 5.6 per cent to $33.08 after it swung to a $15.7m profit in the second quarter from a loss in the same period last year. Nordstrom, which reports earnings on Thursday, gained 1.5 per cent to $34.81, while Federated Department Stores gained 2.7 per cent to $36.90.