Stocks were little changed on Monday as investors awaited comments from Federal Reserve Chairman Ben Bernanke and continued to digest recent data on the crucial labor market.
Bernanke, who is scheduled to speak at the Economic Club of Washington at 12:45 p.m., could give insight into how the Fed might unwind its economic stimulus efforts after Friday's jobs report showed employers cut far fewer jobs than expected in November.
While the report was positive, it also fueled speculation that interest rates could rise sooner than expected. Keeping interest rates near zero has been part of the Fed's efforts to pull the economy out of recession, and some fear the central bank will raise rates before a recovery has been firmly established.
We could have a pullback as investors start to price in higher rates, said Michael Sheldon, chief market strategist at RDM Financial in Westport Connecticut.
Sheldon described the jobs report as a double-edged sword, saying that while the data was positive, the Fed now appears closer to removing some of the tremendous amounts of liquidity it had put into the markets. That's going to lead to volatility and rotating in the market.
The Dow Jones industrial average <.DJI> rose 23.96 points, or 0.23 percent, to 10,413.16. The Standard & Poor's 500 Index <.SPX> climbed 1.04 points, or 0.09 percent, to 1,107.02. The Nasdaq Composite Index <.IXIC> was 0.04 percent lower at 2,193.58.
Gains in the market were also limited as investors moved into other assets, including the U.S. dollar, which edged lower after earlier hitting a five-week high.
The dollar pressured commodities, sending crude oil futures down 1.4 percent while gold fell 2 percent.
Health care companies advanced, however, after MetLife Inc forecast fourth-quarter and 2010 earnings that could top expectations. Wells Fargo upgraded the hospital sector to overweight but cut the managed care sector to market weight.
MetLife shares climbed 3.1 percent to $36.42 while Morgan Stanley Healthcare Payor index <.HMO> gained 2.1 percent.
Credit card firms rose after Bank of America-Merrill Lynch upgraded three companies in the group-- including Dow component American Express Co -- to neutral from underperform. The firm wrote that the trio, American Express, Capital One Financial Corp and Discover Financial Services, , could benefit as the economy improves and credit trends boost sentiment about the sector.
(Editing by Padraic Cassidy)