Stocks drifted sideways on Monday, in what is likely a temporary pause in a sell-off brought on by growing fears of another economic downturn.
The benchmark S&P 500 rose for only the second time in the past nine sessions while the Nasdaq 100 <.NDX> managed to survive a fall below its 200-day moving average at 2,218, quickly reversing those losses.
Investors remained noncommittal about whether stocks have become cheap enough after six weeks of selling to pour some money back into equities again.
If we don't get any great information coming out from the economy or other phases or sectors of items we look at to help gauge our trading decisions, then we may kind of lay here for a couple of weeks -- remain in an oversold environment with nobody willing to take a chance to do anything, said Keith Bliss, senior vice president at Cuttone & Co in New York.
You will see people nibbling around the edges and taking some calculated risks, but you won't see a lot of money plowing into the equity market until we get some direction with regard to employment, taxes, regulatory structure, European debt and our own debt here in the U.S.
Evidence of a weak global economic recovery has provided the impetus for a 6.6 percent drop in the S&P 500 from its May 2nd high. Several strategists have called for a correction of about 10 percent in the index from that recent peak.
At the same time, deals in the insurance, apparel and communications technology sectors underscored the view that valuations are attractive.
Among them, insurer Allied World Assurance Co Holdings Ltd
The Dow Jones industrial average gained 1.06 points, or 0.01 percent, to end at 11,952.97. The Standard & Poor's 500 Index added just 0.85 of a point, or 0.07 percent, to 1,271.83. But the Nasdaq Composite Index dropped 4.04 points, or 0.15 percent, to close at 2,639.69.
Selling pressure continued on Chinese Internet stocks, as E-Commerce China Dangdang Inc
Volume was light with about 6.91 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 7.59 billion.
Declining stocks outnumbered advancing ones on the NYSE by 1,674 to 1,344, while on the Nasdaq, decliners beat advancers 1,670 to 936.
(Reporting by Chuck Mikolajczak)