(Reuters) - The Dow Jones industrial average and the S&P 500 index closed higher on Monday as a spike in energy shares offset sharp declines in large-cap technology names, which dragged down the Nasdaq.
Crude prices, which have largely dictated the direction of the stock market this year, were up more than 5 percent. The S&P 500 energy sector .SPNY, up 2.4 percent, rose for the fifth consecutive session, a streak not seen since October. It is up more than 23 percent from its 2016 low in mid-January.
“The market worked itself to fair value and has taken the scare out. People were far too pessimistic,” said John Manley, chief equity strategist at Wells Fargo Funds Management in New York.
He said the oil market is finding a footing and that is allowing stocks in the sector to bounce. However, it may be harder for the recent stock market bounce to extend much further now that earnings season is winding down.
The Dow Jones industrial average .DJI closed up 67.18 points, or 0.4 percent, to 17,073.95, the S&P 500 .SPX gained 1.77 points, or 0.09 percent, to 2,001.76 and the Nasdaq Composite .IXIC dropped 8.77 points, or 0.19 percent, to 4,708.25.
The S&P notched its fifth consecutive session of gains, a streak not seen since October, and closed above 2,000 for the first time since Jan. 5.
A string of upbeat data from major economies and stabilizing commodity prices have helped improve sentiment ahead of a relatively quiet week in terms of data for Wall Street as corporate earnings season draws to a close.
U.S.-traded Valeant Pharmaceuticals shares (VRX.N) rose 7.1 percent to $65.66. The Canadian drugmaker said it would report fourth-quarter numbers next week, giving investors hope for positive news after months of uncertainty and volatility.
Advancing issues outnumbered declining ones on the NYSE by a ratio of nearly 2-to-1 and on the Nasdaq, a 2.21-to-1 ratio favored advancers.
The S&P 500 posted 11 new 52-week highs and 1 new low; the Nasdaq recorded 37 new highs and 26 new lows.
About 9 billion shares exchanged hands on U.S. exchanges, slightly above the 8.8-billion average in the past 20 sessions.
Reporting by Rodrigo Campos; Editing by Nick Zieminski