Stocks edged higher on Monday, but pulled back from intraday peaks after a four-day rally that drove the major indexes to 10-month highs.
Stock investors retreated slightly after a sharp gain in U.S. Treasury prices, which drove benchmark yields lower.
Wall Street had rallied earlier, joining a global advance in equities and commodities, on Federal Reserve Chairman Ben Bernanke's optimistic comments and U.S. housing data last week.
The market is reacting to a U.S. Treasury market rally, said Peter Boockvar, equity strategist at Miller Tabak & Co, in New York.
We have been recently seeing a disconnect between the two markets. Stocks were up on economic optimism and bonds were up on economic concerns ... Investors are finally catching up with this, and seeing Treasuries as a sign that they should not be buying so much.
U.S. Treasury debt prices rose on Monday, with the 30-year bond gaining more than a full point as investors did some bargain hunting after Friday's sharp losses and the Federal Reserve bought government debt.
The semiconductor index <.SOXX> slipped 0.4 percent, while an index of bank shares <.BKX> edged up 0.1 percent.
Shares of chip maker Intel Corp
JPMorgan Chase & Co
The Dow Jones industrial average <.DJI> advanced 20.25 points, or 0.21 percent, to 9,525.21, off a session high at 9,587.73. The Standard & Poor's 500 Index <.SPX> rose 1.94 points, or 0.19 percent, to 1,028.07. The Nasdaq Composite Index <.IXIC> gained 2.45 points, or 0.12 percent, to 2,023.35.
Earlier, the S&P 500 rose as high as 1,035.82, while the Nasdaq hit an intraday high at 2,036.03.
On the upside, drugmaker Warner Chilcott
Stocks had little reaction to data from the Federal Reserve Bank of Chicago showing production-related indicators turned positive in July for the first time since October.
(Editing by Jan Paschal)