US STOCKS-Dow, S&P advance but tech weighs on Nasdaq

* ISM factory activity index for June rises to 57.8 vs. est.
55.2

* Dow up 0.61 pct, S&P 500 up 0.23 pct, Nasdaq down 0.49 pct
(Updates with U.S. market close)

By Chuck Mikolajczak

July 3 (Reuters) – The S&P 500 and Dow Industrials moved
higher on Monday, with the Dow hitting an intraday record as
energy and bank stocks gained, but continued weakness in the
technology sector pulled the Nasdaq lower.

The S&P energy index rose 2.0 percent, its best performance
in nearly a month, led by gains in Exxon Mobil and
Chevron.

Both Brent and U.S. crude climbed more than 1 percent to
resume its longest stretch of daily rallies in more than five
years after data pointed to moderating U.S. output, pushing
energy names higher.

“Oil is rallying today so that is causing some excitement in
the energy space, but that is what you would expect because oil
has been so beaten up,” said Ken Polcari, Director of the NYSE
floor division at O’Neil Securities in New York.

Financials, up 1.3 percent, also supported gains.
With the sector notching its sixth advance in the seven
sessions.

The Nasdaq was lower as the technology sector saw
its recent struggles continue, down 0.9 on the session after a
drop of nearly 3 percent last week.

Trading volume was light on Monday, due to the abbreviated
trading session ahead of the Independence Day holiday on
Tuesday.

The Dow Jones Industrial Average rose 129.64 points,
or 0.61 percent, to 21,479.27, the S&P 500 gained 5.6
points, or 0.23 percent, to 2,429.01 and the Nasdaq Composite
dropped 30.36 points, or 0.49 percent, to 6,110.06.

Also helping sentiment was data that showed U.S. factory
activity jumped in June to its highest level in almost three
years suggesting economic growth in the second quarter gained
some steam, while construction spending held steady in May.

The Institute for Supply Management said its index of
national factory activity rose to a reading of 57.8 last month
from 54.9 in May.

In a bullish signal for the market, the Dow Transportation
Average, which includes airlines, railroads and package
delivery companies and is often viewed as a barometer of
economic activity, closed at a record.

“If (people) are comfortable with the economy, the
transports certainly is a leading sector. If the economy is
going to get better, transports, rails, truckers, airlines and
all that stuff will do better in anticipation of that,” Polcari
said.

Automakers advanced, with Ford up 3.3 percent and
General Motors up 1.8 percent as vehicle sales figures
for June showed retail sales to consumers were relatively stable
at the U.S. automakers.

Advancing issues outnumbered declining ones on the NYSE by a
2.55-to-1 ratio; on Nasdaq, a 1.51-to-1 ratio favored advancers.

About 3.77 billion shares changed hands in U.S. exchanges,
compared with the 7.18 billion daily average over the last 20
sessions.
(Reporting by Chuck Mikolajczak; Editing by Frances Kerry)


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