LIVE MARKETS-In like a lion: Stocks end green after dire start

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IN LIKE A LION: STOCKS END MUTED AFTER DIRE START

It took just over two hours of trading on Monday for investors to overcome their risk aversion in response to the U.S.-Israeli war on Iran and its apparent spill-over into Beirut, Kuwait and elsewhere.

But overcome it they did, with all three major indexes pulling back from the abyss and ending the session mixed.

The Dow Jones Industrial Average <.DJI> fell 73.14 points, or 0.15%, to end at 48,904.78, the S&P 500 <.SPX> rose 2.74 points, or 0.04%, to finish at 6,881.62 and the Nasdaq Composite <.IXIC> rose 80.65 points, or 0.36%, to 22,748.86.

The S&P 500 energy .SPNY and industrial sectors .SPLCRI logged all-time closing highs.

Early in the session, the CBOE Market Volatility index .VIX broke above 25, touching its highest level since November 21. It soon retreated to the range in which it coasted for much of February.

None of this is out of the ordinary.

As Mark Hackett, chief market strategist at Nationwide puts it, "the market’s first move on geopolitical headlines is almost always an overreaction."

"What matters isn’t the market open but rather where we close today and how investors process this over the next few days," Hackett adds. "Historically, geopolitical events create a spike in volatility, not lasting damage."

With crude prices CLc1, LCOc1 settling well north of 6% on the day due to supply pressures, it's no surprise energy shares led gains among the S&P 500's .SPX 11 major sectors, rising 1.9%.

Likewise, it's hardly a shocker that war machinery makers had a good day. The S&P 1500 Aerospace and Defense Index .SPCOMAED notched a 2.5% increase.

Many of Monday's underperformers were consumer-focused. Consumer staples .SPLRCS and discretionary .SPLRCD slid 1.4% and 1.1%, respectively, while commercial airlines .SPCOMAIR, travel-leisure .SPCOMHOTL and retail .SPXRT lost between 1.0% and 2.6%.

On the economic front, ISM and S&P Global's dueling PMIs agreed that U.S. factory activity expanded last month, albeit with a spike in input prices that could translate to hotter inflation down the pike.

Later in the week, services PMI, import prices, and retail sales are all on the docket. But ADP's employment index, Q4 labor prices/productivity, Challenger layoffs, jobless claims are all prelude to the Labor Department's February jobs report expected on Friday, which could show whether January's surprise spurt is a sign or signal, particularly considering the sharp downward revision to 2025 total job adds.

Here's your closing snapshot:

(Stephen Culp)

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