NEW YORK ( TheStreet) -- U.S. stocks struggled to eke out gains Monday after a larger-than-expected drop in factory orders compounded concerns over a stagnating job market and a global economic slowdown. Trading was choppy throughout the session. After initially opening positive, all three major U.S. equity indices dropped below the flat line through midday, extending Friday's deep losses as investors remained cautious following the dismal May jobs report before buying picked up late in the day.
The Dow Jones Industrial Average dropped 17 points, or 0.1%, to close at 12,101. The blue-chip index, which has now fallen in four straight sessions, ranged from 12,035 to 12,143, pulling off an intra-day swing of more than 100 points. The S&P 500 finished flat at 1278, while the Nasdaq rose by 12 points, 0.5%, to settle at 2760. Within the Dow, 14 of the 30 components closed in the green. Home Depot ( HD) and Alcoa ( AA) were the biggest percentage gainers. The biggest percentage decliners were JPMorgan Chase ( JPM), Caterpillar ( CAT), General Electric ( GE) and Bank of America ( BAC). From a sector standpoint, strength in services and energy was offset by weakness in transportation and financial stocks. U.S. stocks were punished Friday after the government said the economy added far fewer jobs than expected in May, adding to concerns about a global slowdown. The Dow went negative for the year, and both the S&P 500 and Nasdaq are now down more than 10% from their intraday highs of 2012. The main catalyst for Friday's sell-off was news that the U.S. economy added just 69,000 jobs last month, well below the more than 150,000 economists were expecting. Nonfarm payrolls for April were revised lower as well, reinforcing worries that the recovery is slowing down. On Monday, there was more bad news, with the Commerce Department reporting that April factory orders dipped a larger than expected 0.6% from a downwardly revised decline of 2.1% in March. Economists surveyed by Briefing.com expected orders to dip 0.3%. The Nikkei in Japan settled down 1.7%, and Hong Kong's Hang Seng fell 2% after the National Bureau of Statistics and China Federation of Logistics and Purchasing said China's nonmanufacturing sector experienced its slowest growth in more than a year in May, dipping to 55.2 from 56.1 in April. The DAX in Germany settled down by 1.2% as German Chancellor Angela Merkel once again expressed her aversion to jointly shared debt in the eurozone over the weekend. "Rumors that Europeans are getting along and listening to Merkel," could potentially push the market upwards, said Uri Landesman, president of Platinum Partners. Meanwhile, Spanish newspaper El Pais reported that Spain's finance minister, Luis de Guindos, was in talks with European partners to strengthen the country's banking system without requiring an international bailout. A dip in Spain's May jobless numbers was a small positive. After the bell on Monday, rating agency Egan Jones downgraded the United Kingdom's credit rating to AA minus from AA. There was some feeling out there that market could be treading water for a while; although the trend for stocks is obviously negative right now. "I think that the market is going to bounce around without much direction until we get to that moment in time
where there are more data points coming out ," said Chris Detmer, senior vice president at RBC Wealth Management. "The market is holding its breath for June 17 Greek elections and June 19 and 20 Fed meeting," said Aaron Brachman, senior financial associate at RBC Wealth Management. "These are the two bigger market moving events." The benchmark 10-year Treasury was down 20/32, raising the yield to 1.526%. The U.S. dollar was down 0.29% at $82.56, according to the U.S. dollar index. July oil futures rose 75 cents to settle at $83.98 a barrel, and August gold futures slipped $8.20 to settle at $1,613.90 an ounce.
In corporate news, Chesapeake Energy ( CHK) has bowed to pressure from billionaire investor Carl Icahn and is replacing nearly half of its board. The stock surged 6%. WellPoint ( WLP) has agreed to buy contact-lens maker 1-800 Contacts. A purchase price wasn't disclosed, but a person familiar with the matter told The Wall Street Journal the deal was worth close to $900 million. The shares lost 1.6%. Facebook ( FB) shares fell 3% to $26.90 after Bernstein Research initiated coverage on the stock with an underperform rating with a price target of $25. Shares of Regions Financial ( RF) shed more than 5% after Deutsche Bank downgraded the stock. Home builders Pulte Group ( PHM), Lennar ( LEN) and D.R. Horton ( DHI) were among the biggest losers on the S&P 500, losing more than 4% each. -- Written by Andrea Tse and Shanthi Bharatwaj in New York.