NEW YORK - Monday proved a roller-coaster ride for the stock market that ended with major U.S. indexes closing mostly higher.
The Standard & Poor’s 500 index rose 6.03 points, or 0.3 percent, to close at 1,869.43, and the Dow Jones industrial average rose 87.28 points, or 0.5 percent, to 16,448.74. However, the Nasdaq edged down 1.16 points, or 0.03 percent, to 4,074.40, erasing most of a 61-point loss from earlier in the day.
Traders were pulled in multiple directions. Stocks opened higher, fell in the afternoon, then mostly rose again in the last hour of trading.
Bank stocks fell after Bank of America said a financial error would force it to cancel a stock buyback plan and dividend increase, while healthcare stocks rose after U.S. drug giant Pfizer renewed its pursuit of a merger with British rival AstraZeneca. Formerly highflying technology stocks fell again, dragging the Nasdaq composite index into the red.
Bank of America sank $1, or 6.3 percent, to $14.95 after it unexpectedly announced it discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.
Shares of Goldman Sachs and Citigroup each retreated about 1 percent after Bank of America’s announcement. JPMorgan Chase edged down 0.4 percent.
High-risk technology stocks were another area of weakness Monday as investors continue to cut their exposure to highgrowth names and turn their focus to larger dividend-paying companies. Amazon fell $7.25, or 2.5 percent, to $296.58 after falling 10 percent Friday. Netflix lost $7.87, or 2.4 percent, to $314.21, and Facebook fell $1.57, or 2.7 percent, to $56.14.
In contrast, “old” technology companies such as Microsoft, Apple and IBM, which have more mature businesses and pay quarterly dividends, rose 2 percent or more Monday.
High-growth technology and biotechnology stocks have been falling for the past several weeks. The Nasdaq is down 3 percent in April, while the S&P 500 and Dow are roughly flat.
Traders say the selling has been coming from large investors who have been moving out of high-growth stocks and into safer investments. The Russell 2000, an index made up mostly of smaller companies, is down 4.8 percent this month.
“When you have so many investors doing the same thing at the same time, you get these exaggerated moves in some of these stocks,” said Ian Winer, director of equity trading at Wedbush Securities.
Health-care stocks did well after Pfizer renewed its push to buy AstraZeneca for $100 billion. If a deal is reached, it would be the latest in a series of big mergers in the drug industry in recent weeks.
Investors are expected to turn their focus to the Fed, which starts a two-day policy meeting today. The central bank is expected to further dial back its economic stimulus by reducing its monthly bond purchases to $45 billion.
In other markets, bond prices fell, pushing the yield of the 10-year U.S. Treasury note up to 2.70 percent from 2.66 percent Friday. Gold was little changed at $1,299 an ounce.
Business, Pages 24 on 04/29/2014