NEW YORK — Stocks came back from early losses Monday to post moderate gains as traders funneled money into utility and financial stocks.
Major market indexes ended at their highest levels in nearly a year.
Stocks slid at the open after a drop in overseas markets on worries that a trade war would erupt between the U.S. and China.
But the market recovered as investors seized on the opportunity to inject new money into shares. The Dow ended with a gain of 21 points.
Utility AES helped pull the market higher after The Wall Street Journal reported that China’s investment arm is interested in buying a stake in the company.
Analysts said the market’s gains are impressive because the Standard & Poor’s 500 index has jumped 55.1 percent in six months.
“We open lower, and buyers seem to chip away and we climb higher,” said Adam Gould, senior portfolio manager at Direxion Funds in New York. “It’s somewhat healthy that we’re rallying this way — slowly.”
The Dow rose 21.39, or 0.2 percent, to 9,626.80. The broader Standard & Poor’s 500 rose 6.61, or 0.6 percent, to 1,049.34, an 11- month high. The Nasdaq composite rose 10.88, or 0.5 percent, to 2,091.78.
The early losses came after the U.S. government late Friday imposed trade penalties on tires coming from China at the behest of U.S. labor unions, who say China continues to subsidize its manufacturers and channel government funds into export-oriented businesses. The Chinese government filed a complaint with the World Trade Organization.
Investors had worried it would erupt into a tariff dispute that could damage an economic recovery.
Monday’s zigzags came in sharp contrast to the tumult of a year ago, when Lehman Brothers’ collapse sent the Dow down 500 points in a day and jammed the credit markets that power the world’s economies.
The S&P 500 index is still down 16.2 percent from that time and 33 percent from its peak in October 2007.
“Questions remain, but a lot of the uncertainty has largely been removed,” said Richard Ross, global technical strategist at Auerbach Grayson in New York. “We’re striking a much healthier balance between greed and fear.”
