NEW YORK — Stocks mostly fell Monday but ended off their lows as investors moved into technology and health care shares.
News of Dell Inc.'s plans to buy information technology company Perot Systems Corp. for $3.9 billion helped to lift some tech stocks but failed to raise the broader market. A stronger dollar ignited a sharp sell-off in commodities such as oil and gold, which weighed on energy and material shares.
Stocks and commodities have been on a relentless ascent over the past six months as investors make bets that the economy is healing, bolstered by improving activity in the housing and manufacturing industries and better consumer sentiment.
With stocks up more than 50 percent since bottoming in early March, analysts say breaks in the rally are healthy.
"This is what should happen, needs to happen, is going to happen along the way but it doesn't mean we're headed down significantly from here," said Jordan Smyth, managing director at Edgemoor Investment Advisors in Bethesda, Md.
Meanwhile, a private sector group's forecast of economic activity on Monday further validated Federal Reserve Chairman Ben Bernanke's pronouncement last week that the U.S. recession was "likely over" from a technical standpoint.
The Conference Board's index of leading economic indicators increased 0.6 percent in August, just shyof the 0.7 percent increase economists expected. It was the fifth straight month the index rose.
The Dow Jones industrial average fell 41.34, or 0.4 percent, to 9,778.86, after earlier falling as much as 95 points.
The broader Standard & Poor's 500 index fell 3.64, or 0.3 percent, to 1,064.66, while the tech-heavy Nasdaq composite index rose 5.18, or 0.2 percent, to 2,138.04.
About two stocks fell for every one that rose on the New York Stock Exchange, where volume came to 4.7 billion shares compared with 6.12 billion Friday. Volume was heavy last week because of the expiration of options contracts on Friday.
The dollar rose against other major currencies, sending prices for gold, oil and other commodities tumbling. Commodities are priced in dollars, so a stronger greenback makes them less appealing for foreign investors.
Oil prices dropped $2.33 to settle at $69.71 a barrel on the New York Mercantile Exchange, driving energy stocks lower. Sunoco Inc. lost 65 cents, or 2.3 percent, to $27.79.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.48 percent from 3.46 percent late Friday.
Trading on Monday reflected a shift out of risky assets that have benefited from the stock market's advance and into safe plays like the dollar and government bonds.
Investors are taking some money off the table ahead of the Federal Reserve's two day rate-setting meeting that begins today.
Business, Pages 20 on 09/22/2009