NEW YORK: U.S. stocks closed mixed in high volume trade Monday, with gains in health care offsetting declines in materials and energy as oil prices fell.
“It seems like there’s a lot of rotation going on into the safe havens,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “I think there’s concern about the strength of the economy, the overall lag of the rally that’s been occurring in oil. There’s concerns about China as well. The dollar is stronger as well. That’s certainly not helping the commodity space.”
U.S. crude oil futures settled down $1.22, or 2.73 percent, at $43.44 a barrel. Materials closed 1.25 percent lower, while energy ended 1.24 percent lower.
Health care closed more than 1 percent higher to lead advancers, followed by utilities and consumer staples. The iShares Nasdaq Biotechnology ETF (IBB) closed nearly 2.6 percent higher for its best day since April 21.
Mike Bailey, director of research and chair at FBB Capital Partners, attributed the gains in the health care sector to better investor sentiment with “not a new major negative in the group, and some mild positives.”
Mallinckrodt closed 6.12 percent higher and Allergan closed up nearly 6 percent to lead health care advancers.
Amazon.com, Celgene and Amgen had the greatest positive impact on the Nasdaq 100.
The Dow Jones industrial average underperformed, closing about 35 points lower with Caterpillar and Chevron contributing the most to declines. Johnson & Johnson contributed the most to gains.
“The market’s just really in search of a signal right now and there’s no (U.S.) economic data to provide it,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
As of the close, trade volume across exchanges was about 12.1 billion, the highest volume day since January. LendingClub topped active and unusual volume activity with nearly 15 times its 30-day average
volume of 6.5 million shares. The stock plunged nearly 35 percent after the company said co-founder Renaud Laplanche had resigned as chairman and CEO.
The U.S. dollar index rose nearly 0.3 percent, after hitting its highest since April 28, for its first five-day win streak since the one ended March 24. The euro was last near $1.138 and the yen at 108.39 yen against the greenback.
“I think the big news today to me is dollar-yen. Dollar-yen really starting to squeeze the shorts out,” said Jeremy Klein, chief market strategist at FBN Securities.
Japanese Finance Minister Taro Aso said Monday in a Reuters report that Tokyo is ready to intervene in the currency market if yen moves are volatile enough to hurt the country’s trade and economy.
Treasury yields held lower, although above lows touched Friday. The 2-year yield was near 0.71 percent after falling to 0.686 percent, its lowest since February 12, on Friday. The 10-year yield held near 1.75 percent.
“The strong dollar and EM selling off, oil lower, somewhat risk-off or deflationary tone today,” said Eric Stein, co-director of global fixed income at Eaton Vance Management. But longer-term, he said “inflation expectations will come back up.”
The iShares MSCI Emerging Markets ETF (EEM) closed nearly 1.3 percent lower. The ETF is more than 5 percent lower for the quarter so far, but still up about 0.7 percent year-to-date.
Earlier, oil rose amid news of declines in daily production capacity from Canada’s most destructive wildfire in recent memory. Reuters said the lost capacity of about a million barrels equals more than a third of the country’s typical daily production, and nearly all of Canada’s crude from oil sands is exported to the United States.
“The crosscurrents are playing in a commodities market that’s had a significant lift,” said Art Hogan, chief market strategist at Wunderlich Securities.
