By Kimberly Chin
(Reuters) - The benchmark U.S. S&P 500 stock index ended up slightly on Monday after two days of declines, though a drop in oil prices weighed on energy shares and tensions between the United States and North Korea kept investors on edge.
Market participants began to turn their focus to the Federal Reserve meeting at Jackson Hole, Wyoming later this week which will be attended by Fed Chair Janet Yellen, European Central Bank president, Mario Draghi, and other global central bankers.
Investors are looking for further direction on where monetary policy is headed given persistently low inflation in the U.S. and Europe. Fed Vice Chair William Dudley, who has in the past supported accommodative monetary policy, earlier this month said that the recent easing in financial conditions, despite Fed interest rate increases, is a reason to keep plans to tighten policy in place.
"That confluence of strong growth and low inflation, which is somewhat like nirvana for equity investors, we don't think can last forever," said Wayne Wicker, chief investment officer at ICMA-RC in Washington.
"We're hopefully getting a couple of more data points to see where the Fed takes their temperature on where they're feeling the economy is at this juncture so that we can anticipate if something happens in the fourth quarter or not."
Geopolitical concerns are still weighing on investor sentiment also. The United States and South Korea began their annual autumn joint military exercises on Monday, heightening tensions with North Korea, which called the drills a "reckless" step toward nuclear conflict.
Still, absent U.S. economic data and with the second-quarter earnings nearly over, "it’s a quiet Monday and people are still feeling the effects of last week... there's just not a whole lot of catalysts," said Ian Winer, head of equities at Wedbush Securities in Los Angeles.
U.S. stock futures trading volume fell during the two hours that people left their offices to get a glimpse of the first total solar eclipse to unfold across the country in nearly a century.
About 174,000 S&P 500 e-mini futures (ESc1) futures changed hands over the two hour period ending 3:30 p.m. E.T. on Monday, down about 46 percent for the comparable period last year. [L4N1L74AA]
The Dow Jones Industrial Average (DJI) rose 29.24 points, or 0.13 percent, to 21,703.75, the S&P 500 (SPX) gained 2.82 points, or 0.12 percent, to 2,428.37 and the Nasdaq Composite (IXIC) dropped 3.40 points, or 0.05 percent, to 6,213.13.
The S&P 500 energy index (SPNY) was down 0.6 percent, leading sector declines in the S&P 500, with U.S. crude oil prices settling down 2.4 percent, giving back last week's gains.
While the benchmark S&P 500 index is still up 13.5 percent since last year's U.S. election, it had fallen 2.1 percent in the last two weeks. That's the most since the two weeks before the election.
The Dow ended above its 50-day moving average after briefly falling below it during the session, while the S&P 500 remained below its 50-day technical level.
Also, Monday was the ninth straight session in which the New York Stock Exchange and Nasdaq had more stocks making new 52-week lows than highs, the longest such streak in 18 months.
Shares of sporting good retailers took a hit after analysts downgraded ratings on Nike (N:NKE), Foot Locker (N:FL) and other companies. Nike's shares fell 2.4 percent, while Foot Locker shares slid 7.4 percent.
Johnson Controls (N:JCI) rose 3.3 percent to $38.27, among the top S&P 500 gainers, after saying its CEO change would happen earlier than announced.
Herbalife (N:HLF) surged 9.8 percent after the nutritional supplement maker said it would buy back $600 million of shares after ending talks to be taken private.
Declining issues outnumbered advancing ones on the NYSE by a 1.01-to-1 ratio; on the Nasdaq, a 1.30-to-1 ratio favored decliners.
The day's volume was among the lowest of the year, with 5.3 billion shares changing hands on U.S. exchanges, compared with the 6.3 billion daily average for the past 20 trading days, according to Thomson Reuters data.