S&P 500 and Dow Jones Industrial Average traded slightly lower, China market faded with oil

The S&P 500 and Dow Jones Industrial Average traded slightly lower on Monday, as early gains tracking a rally in China market faded with oil and financial stocks pushing the indexes lower.

The S&P 500 and Dow Jones Industrial Average traded slightly lower on Monday, as early gains tracking a rally in China market faded with oil and financial stocks pushing the indexes lower.

But a near 2 per cent gain for Amazon and Apple at the start of a big week for technology earnings, helped the Nasdaq gain and lifted the S&P technology sector more than 1 per cent.

U.S. stocks opened higher following a 4-per cent surge in Chinese stocks and positive sentiment across Europe on Moody's decision to keep Italy's sovereign rating outlook stable.

The markets, however, quickly turned lower, with analysts saying that neither China hope nor Italy relief was enough for Wall Street gains to sustain.

"Futures rallied with China, which obviously has been down close to 30 per cent this year, and there was news of government policy intervention that really wasn't for U.S. markets to be up," said Mike O'Rourke, the chief market strategist in JonesTrading in Greenwich, Connecticut.

Gains in the high-growth stocks capped losses in the S&P and the Dow. Amazon rose 1.7 per cent and Google-parent Alphabet gained 0.75 per cent. Both of them are due to report results later this week.

Both Facebook and Apple gained about 1 per cent and are expected to report quarterly results next week.

"Investors are looking for opportunities to buy right now. They are taking advantage of the recent sell-off to buy high-growth stocks," said Jeff Carbone, managing partner for Cornerstone Wealth, in Charlotte, North Carolina.

The tech sector has lost about 6 per cent of its value so far this month, bringing stock valuations of high-growth companies down from historically expensive levels.

Intel gained 1.2 per cent after Nomura upgraded the stock to "buy", according to a trader.

The energy sector fell 1.3 per cent after crude oil prices slipped below $80 a barrel as Saudi Arabia pledged to raise its crude production to a record.

Also weighing was a 2.9 per cent drop in oilfield services provider Halliburton, which forecast a drop in current-quarter profit.

Financials fell 1.4 per cent, the most among the 11 major S&P sectors as the U.S. Treasury yield curve flattened to its lowest level in more than two weeks.

Leading the losses in health stocks was Bristol-Myers, down 5.7 per cent after the U.S. health regulator said it would take more time to decide on the company's cancer therapy.

At 12:05 a.m. EDT the Dow Jones Industrial Average was down 146.85 points, or 0.58 per cent, at 25,297.49, the S&P 500 was down 9.66 points, or 0.35 per cent, at 2,758.12 and the Nasdaq Composite was up 29.79 points, or 0.40 per cent, at 7,478.82.

A number of disappointing earnings reports also did not help the mood ahead of what is expected to be the heaviest earnings week this season.

While a strong economy and deep corporate tax cuts are expected to have driven profits of S&P 500 companies up 22 per cent in the third quarter, according to Refinitiv data, investors are nervous over the outlook for future growth due to concerns over trade, rising costs and other factors.

Hasbro dropped 4.6 per cent after its quarterly results missed estimates, as the demise of major retail partner Toys 'R' Us hurt sales in the United States and Europe. Mattel fell 1.2 per cent.

Declining issues outnumbered advancers for a 1.27-to-1 ratio on the NYSE and for a 1.10-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 44 new lows, while the Nasdaq recorded 12 new highs and 185 new lows.