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TWO STEPS BACKWARD, ONE STEP FORWARD: WALL STREET STAGES PARTIAL COMEBACK

U.S. stocks began the week by clawing back some ground lost in Friday's steep selloff, when the S&P 500's nine-week winning streak was derailed and the chip sector alone saw over $1 trillion in capitalization go "poof" at the closing bell.

But Monday's rally was nothing to write home about.

The leadership was narrow (only 3 of the 11 major industry sectors that comprise the S&P 500 ended the session green), and while the Nasdaq logged a sturdy 0.9% gain, the S&P 500's advance was more modest, and the blue-chip Dow ended down about 0.2%.

Less than a week after registering all-time closing highs, the S&P 500 and the Nasdaq were off those highs by 2.7% and 4.3%, respectively. The Dow is now 1.5% below its closing record.

The Dow Jones Industrial Average .DJI fell 80.77 points, or 0.16%, to 50,786.01, the S&P 500 .SPX gained 21.94 points, or 0.30%, to 7,405.68 and the Nasdaq Composite .IXIC gained 220.23 points, or 0.86%, to 25,929.66.

Chips .SOX were the clear outperformers on the day, jumping 5.6% and erasing some of Friday's steep selloff - the index's biggest one-day loss in six years. Utilities .SPLRCU, real estate .SPLRCR, materials .SPLRCM and communication services .SPLRCL all shed more than 1% on the day.

Tensions in the Middle East were in freeze-frame as Iran announced its strikes on Israel will be on hold as long as Israel refrains from attacking Lebanon. Iran's envoy to Moscow was quoted saying traffic through the Strait of Hormuz will reopen, albeit with transit fees.

On Tuesday the Commerce Department is expected to present its trade balance data for April, the National Federation of Independent Business is set to release its Small Business Optimism Index and the National Association of Realtors' May Existing Home Sales data is also due.

But the real action happens on Wednesday and Thursday, when the Labor Department's consumer (CPI) and producer (PPI) data will show the extent to which war-related energy price spikes have seeped into the broader inflationary picture.

Here's your closing snapshot:

(Stephen Culp)

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