The S&P 500 ended slightly higher on Monday as financial stocks rose ahead of a Federal Reserve meeting, but the Nasdaq pared gains sharply as technology stocks lost ground late in the session.
Five of the 11 major S&P sectors ended lower. Rising Treasury yields helped financial stocks, as higher interest rates tend to lift bank profits, but rate-sensitive sectors such as utilities were the weakest.
The Fed meeting, which starts Tuesday, is expected to yield details on how the central bank will unwind its $4.2 trillion portfolio of Treasuries and mortgage-backed securities, nearly a decade after the global financial crisis.
After pushing the S&P above its 2,500-point milestone last week, investors were holding their fire as they awaited more clues on the timing of the next rate hike from Fed Chair Janet Yellen.
However, the Dow still clocked a closing record for the fifth day in a row while the S&P had a closing record for the second consecutive session.
Big technology stocks such as Microsoft and Google parent Alphabet came under pressure late in the session after Amazon said it would move to charging businesses in one-second increments for use of its servers.
Microsoft down 0.2 percent while Alphabet was off 0.6 percent, with both stocks seeing a pickup in volume late in the day.
Approximately 5.97 billion shares changed hands on the major domestic exchanges on Monday, as compared to the 5.91 billion average number of shares for the last 20 sessions.
Toy Companies Fall on Potential Toys ‘R’ Us Bankruptcy
Shares of Mattel and Hasbro fell on Monday over concerns that Toys “R” Us could be filing for bankruptcy before the holiday sales season.
In the latest sign of distress that has ripped through the traditional brick-and-mortar retailers, the word on the Street now is that Toys “R” Us is working to put together a loan to fund its operations in a potential Chapter 11 filing.
The company is one of the three largest customers for both Mattel and Hasbro, according to the companies’ most recent annual reports. The other two are Wal-Mart and Target.
Mattel said in its annual report that it typically makes sales on credit, without collateral, and it warned that a bankruptcy filing by any major customer could significantly affect revenue and profitability.
Toys “R” Us is the second-largest toy retailer behind Amazon, according to data compiled by Muller.
Mattel’s shares fell 5.7 percent to $14.95, and Hasbro was down 1 percent at $93.90 in afternoon trading. Jakks Pacific, a smaller toy company that also relies on Toys “R” Us for its business, fell 7.2 percent to $2.83.