U.S. stocks edged higher on Monday, bouncing back as investors sought bargains after six weeks of declines and the market found technical support.
The Nasdaq 100 <.NDX> fell below its 200-day moving average at 2,218, but quickly reversed those losses.
To pierce that and close below that would really call all hands on deck. That would go from a pullback to a mild correction to real fears of something much more substantial, and I don't think the market is willing to commit to that yet, said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey.
Concerns about a weak global economic recovery have helped push the S&P 500 down 6.8 percent since its May 2 high. Several strategists have called for a correction of about 10 percent in the index from that recent peak.
Also helping the technical picture, an index of semiconductors <.SOX> pared its earlier losses. It also recently broken below its 200-day moving average.
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 <.DJI> was up 35.72 points, or 0.30 percent, at 11,987.63. The Standard & Poor's 500 Index <.SPX> was up 4.68 points, or 0.37 percent, at 1,275.66. The Nasdaq Composite Index <.IXIC> was up 4.78 points, or 0.18 percent, at 2,648.51.
Some investors may be waiting for the S&P 500 to fall to the 1,250 psychological mark before taking longer positions, according to Chris Burba, short-term market technician at Standard & Poor's in New York.
(Reporting by Caroline Valetkevitch; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)