U.S. technology stocks fell on Monday as investors took profits after the Nasdaq hit a 16-month high on Friday, while shares of industrials buoyed the broad market after strong Chinese economic data.
China reported record imports of some commodities and stronger-than-expected exports, fueling gains in world equities and adding to optimism about a global recovery.
The news lifted U.S. companies with large international operations. Construction machinery maker and Dow component Caterpillar Inc jumped 6 percent to $63.96, its largest daily advance in nearly three months.
Aluminum producer Alcoa Inc rose 1.2 percent to $17.22 ahead of its fourth-quarter earnings announcement expected after the close.
But tech hardware makers dragged on the Nasdaq, with Apple Inc down 1.5 percent to $208.79, and Dell Inc and Hewlett-Packard Co also showing losses.
You're getting underperformance in all computer hardware stocks. Dell, Hewlett-Packard are under pressure on concerns of profit-taking in the retail sector ahead of the retail sales data coming Thursday, said Dave Lutz, managing director at Stifel Nicolaus in Baltimore.
The best performing sector today is construction and farm equipment, said Lutz. Retail sales data for December is due to be released on Thursday.
The Dow Jones industrial average gained 29.70 points, or 0.28 percent, to 10,647.89. The Standard & Poor's 500 Index edged up 0.02 point to 1,145.00. The Nasdaq Composite Index dropped 9.92 points, or 0.43 percent, to 2,307.25.
Data from China showed the country ended 2009 with record monthly imports of crude oil and soybeans and a strong appetite for iron ore and copper, while its exports rose 17.7 percent year-over-year, dwarfing a forecast for a 4 percent rise.
Stifel's Lutz said United Parcel Service , up 4.8 percent to $63.04, and FedEx Corp up 2.9 percent to $87.43, both rose on expectations the cold weather affecting parts of the United States will drive consumers away from stores and into online shopping, increasing shipment volumes.
UPS and Caterpillar helped lift the S&P industrial sector 0.9 percent, making it one of the best performing group.
Citigroup raised its long-term oil price estimate to $80 per barrel from $65 and upgraded various top energy companies, including Chevron Corp , whose shares rose 1.5 percent to $80.98.
Analysts on average expect Alcoa to show a profit of 6 cents a share compared with a loss in the 2008 fourth quarter.
Among decliners, Dow component Procter & Gamble shares fell 0.4 percent to $60.21 after BMO Capital Markets cut its rating on the stock on concern Friday's devaluation in Venezuela could hurt sales and revenue as products will be more expensive.
Among the top percentage decliners on the Dow was Walt Disney Co , which lost 2 percent to $31.25 after it was downgraded by Janney Capital Markets.
Tech bellwether International Business Machines Corp fell 1.2 percent to $129.30.