Stock Market Today: Stocks End Lower but Top Not Yet In Sight, Analysts Say

NEW YORK (TheStreet) -- U.S. stock indices closed lower on Monday as investors took a breather after another record run-up in stocks last week that saw the Dow Jones Industrial Average  hit fresh records. 
The Dow Jones Industrial Average closed down 0.62% to 17,172.68. The S&P 500 fell 0.8% to 1,994.29. The Nasdaq  finished lower by 1.14% to 4,527.69. The Nasdaq's pronounced decline was driven by a 0.76% dip in the S&P 500 Information Technology sector as Yahoo! (YHOO) fell 5.57% after two research firms downgraded the stock following Friday's initial public offering of China's Alibaba (BABA) . Tech heavyweight Microsoft  (MSFT)  settled down 0.97% after it delayed the launch of its Xbox One game console in China.
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Though the broad benchmark S&P 500 is up by the high single digits, up nearly 8% for the year, strategists say U.S. equities still have more room to run.

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Watch the video below for a closer look at how U.S. markets ended the trading day Monday:

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Schaeffer's Investment Research's senior equity analyst Joe Bell for one doesn't believe the lackluster action on Monday points to evidence of a market top. "We saw a strong rally entering September and all of August. Volatility charts show investors are high on optimism," said Bell. "There's just a healthy bit of skepticism in the market and any pullbacks will be short because people are going to be hedged."

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Banyan Partners' chief market strategist Robert Pavlik said although the S&P 500 is up about 8% year to date, the market hasn't yet reached a top. Investors have seen relief in the short term from uncertainties such as September's tradition of soft trading patterns and anticipations of changes in Fed policy, he said.

Although some worries about an early rate hike are creeping back in and impacting certain sectors such as utilities, consumer staples and telecoms, Pavlik said in the long run a higher interest rate environment will be good for the economy as it would encourage banks to lend more and spur consumer action.

"For the remainder of 2014 I'm still optimistic and I continue to position my client's portfolios with a focus on growth that will arrive as the U.S. returns to a more normalized interest rate environment," said Pavlik.

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