Tech Stocks Pressure NASDAQ; Strong Financial Sector Underpins Dow, S&P 500

U.S. stocks settled mixed on Monday with the blue chip Dow and benchmark S&P 500 eking out small gains on the back of a strong financial sector and the NASDAQ Composite falling victim to a sell-off in the technology sector.

In the cash market, the Dow Jones Industrial Average closed at 21409.55, up 14.79 or +0.07%. The S&P 500 Index settled at 2439.07, up 0.77 or +0.03% and the NASDAQ Composite ended the session at 6245.63, down 19.62 or -0.31%.

The Dow ended a five-day losing streak, helped by solid gains in Goldman Sachs. At one point, the Dow was up 100 points before giving back most of its gains because of the sell-off in technology.

The S&P 500 Index struggled after early gains were erased. Advances in utilities, telecommunications and financial probably prevented a lower close.

Facebook, Amazon and Alphabet (Google’s parent) gave up all of their initial gains to lead the NASDAQ. Traders said the selling pressure began with a decline in semiconductor stocks.

The financial sector was boosted by strong gains in the banking industry. Bank stocks rose after the Italian government said it reached a deal to wind up Popolare di Vicenza and Veneto Banca, two regional banks.

The bailout of the Italian banks combined with the stress test results from U.S. banks was seen as the catalyst behind the rally in bank stocks.

Finally, the CBOE Volatility Index (VIX) continued to demonstrate complacency with a read of about 9.7, falling below 10 for the first time since June 9.

Economic News

In the U.S., durable goods fell 1.1 percent in May, more than the expected 0.5 percent forecast. Core Durable Goods Orders finished up 0.1 percent, below the 0.4 percent forecast but better than the minus 0.5 percent previous read.

In other news, President Donald Trump met with Indian Prime Minister Narendra Modi for the first time. The two leaders are expected to discuss immigration and a visa program that lets Indian IT talent work in the U.S.

Gold

August Comex gold futures fell to its lowest price in nearly six weeks. Most of the weakness was attributed to a “flash crash” early in the session from which the market never recovered. Apparently, a trader sold 18,500 contracts of gold by mistake, triggering sell-stops below $1250.00. Losses, however, were limited by geopolitical concerns.

Crude Oil

Crude oil futures nudged higher on Monday, led by end of the quarter “book squaring”, profit-taking and aggressive counter-trend buying. Despite three consecutive higher sessions, crude oil remains weak due to a global supply glut fueled by huge U.S. production and doubts over whether the OPEC-led production cuts will lead to reduced supply and price stability.