Tech-heavy benchmarks recover, Dow edges lower

The new trading week opened with a mixed close on Wall Street. The Nasdaq Composite and Nasdaq 100 each added over 1%, whereas the Dow Jones Industrial Average saw a slight decline.

Following last week's sell-off, investors stepped back into select technology stocks. Amazon spearheaded the large-cap recovery, jumping close to 5%, while storage, semiconductor and software names were among the top gainers.

Yet the rally was not widespread. On both the S&P 500 and Nasdaq, decliners outnumbered advancers. While buyers are active, a broader-based rally would lend more conviction to the rebound.

Closing figures for the session:

• The Dow Jones Industrial Average dropped 35.81 points, or 0.07%, ending at 51,966.60.

• The S&P 500 rose 33.20 points, or 0.43%, to 7,692.64.

• The Nasdaq Composite gained 290.85 points, or 1.11%, to 26,430.89.

• The Russell 2000 added 6.92 points, or 0.25%, to 2,728.29.

• The Nasdaq 100 climbed 341.80 points, or 1.17%, to 29,529.35.

Amazon drove gains, aided by chip and software stocks.

Among big tech, Amazon stood out with a 4.98% climb to $262.45. Nvidia advanced 1.38% to $217.09, and Microsoft rose 0.84% to $533.52.

Apple declined 0.15% to $342.94, sitting out the rally. This disparity underscores that even among the largest tech firms, traders are being selective.

Individual stocks that outperformed include:

• Western Digital gained 6.12%.

• SanDisk climbed 5.50%.

• Datadog rose 5.35%.

• SK Hynix ADR added 4.67%.

• Palantir advanced 4.36%.

• Marvell rose 4.06%.

Buying spread outside tech. Celsius climbed 5.43%, and Moderna advanced 4.07%.

Dow's weakness points to market divergence.

The Dow ended slightly down, as 19 member stocks fell and 11 rose.

Amazon's robust performance, along with gains in IBM (+1.85%), Nvidia (+1.38%) and UnitedHealth (+1.36%), softened the index's decline. However, multiple Dow components in finance, health care and other sectors fell:

• JPMorgan dropped 1.79%.

• Amgen fell 1.75%.

• 3M declined 1.66%.

• MercK slipped 1.58%.

• Verizon eased 1.44%.

The outcome was a trading day in which tech-heavy indexes posted solid advances, yet the typical stock struggled.

Market breadth indicates more work for buyers.

Beneath the surface, participation data were less rosy than the index headlines suggest:

• On the S&P 500, 166 stocks advanced while 318 declined.

• On the Nasdaq, 1,432 advanced versus 1,768 that declined.

• Within the Nasdaq 100, 60 advanced compared to 40 that declined.

• On the NYSE, 611 advanced as 1,181 declined.

Within its own group, the Nasdaq 100 showed stronger breadth. But across the wider market, decliners still led.

This does not cancel the advances. But it does show that Monday's rally was narrow. The next challenge for buyers is to preserve these gains and broaden the advance.

Lesson for traders: look past the index.

An index can move up even if the majority of its stocks are down. In a capitalization-weighted index like the S&P 500, bigger companies have more impact. Big gains in a few large stocks can offset minor losses in many others.

For traders, the index offers context, but each stock requires its own technical plan. A higher Nasdaq boosts sentiment, but a stock must still break and hold above its resistance.

Monday provided buyers with some relief. The next question is whether they can capitalize on it.