Blue chips stay buoyant
S&P 500 hits a 5-month high and the Dow transports reach an all-time mark following a better-than-expected leading indicators report.
NEW YORK (CNNMoney.com) -- Blue chips clung to gains Monday, with the S&P 500 narrowly eking out a five-month high, thanks to a stronger-than-expected economic indicators report. But tech selling kept the Nasdaq in the red, along with record commodity prices.
The Dow Jones industrial average (INDU) added 0.3%. The broader Standard & Poor's 500 (SPX) index closed just above unchanged, ending at a fresh five-month high. The Nasdaq composite (COMP) lost 0.5%.
Stocks struggled Monday morning on record commodity prices and a weak outlook from Lowe's, before turning higher late morning after the release of the April index of leading economic indicators (LEI). Some tech selling dragged on the Nasdaq in the afternoon, while the broader market clung to gains.
LEI increased 0.1% in April versus forecasts for a flat reading, the Conference Board reported. Although not usually a market mover, the forward-looking report proved supportive to stock investors Monday.
"The LEI is showing that the economy remains weak, but is so far avoiding a recession, so that's helping stocks," said Peter Cardillo, chief market economist at Avalon Partners.
That economic optimism was also reflected in the Dow Jones transportation average, which soared to an all-time high as railroad stocks continued to surge.
That leadership was important, because railroads are historically among the first areas that recover after a recession or economic slowdown. Railroads and select truckers have been recovering for several months, even before investors began to forecast that the worst of the credit crisis is over.
Tuesday brings earnings reports from Home Depot (HD, Fortune 500), Target (TGT, Fortune 500) and Staples (SPLS, Fortune 500) before the bell and Hewlett-Packard (HPQ, Fortune 500) after the bell. The morning also brings the release of the Producer Price Index (PPI), a measure of inflation at the wholesale level that's due in the morning.
Company news: Microsoft (MSFT, Fortune 500) and Yahoo (YHOO, Fortune 500) are discussing a possible deal that would include the purchase of Yahoo's search business, following Microsoft's failed attempt to buy the Internet company earlier this month.
Flash memory maker SanDisk (SNDK) reportedly made bearish comments about its sales outlook at a JP Morgan tech conference. The comments weighed on the shares of SanDisk and other technology stocks, Briefing.com reported.
Amazon.com (AMZN, Fortune 500) shares jumped 7.6% after Goldman Sachs resumed coverage of the company with a "buy" rating and boosted its six-month price target to $98 from $75, according to reports.
The runup in oil prices gave a lift to oil services stocks, including Chevron (CVX, Fortune 500), Exxon Mobil (XOM, Fortune 500), Valero Energy (VLO, Fortune 500) and Hess (HES, Fortune 500).
In earnings news, Lowe's (LOW, Fortune 500), the No. 2 home improvement retailer, reported weaker earnings that topped estimates on lower revenue that missed estimates due to the impact of the struggling U.S. economy and slumping housing market. Lowe's also warned that full-year results won't meet forecasts. Shares fell 2.6%.
Market breadth was negative. On the New York Stock Exchange, losers beat winners 8 to 7 on volume of 1.15 billion shares. On the Nasdaq, decliners topped advancers four to three on volume of 2.27 billion shares.
Commodity prices: U.S. light crude oil for June delivery rose 76 cents to settle at a record $127.05 a barrel on the New York Mercantile Exchange, after hitting an all-time trading high of $127.82 a barrel Friday.
The national average price for a gallon of regular unleaded gas rose to a record $3.794, according to AAA. It was the 12th straight record high.
COMEX gold for August delivery rose $6.10 to settle at $910.20 an ounce.
Other markets: The dollar rose versus the euro and yen.
Treasury prices gained, lowering the yield on the 10-year note to 3.83% from 3.84% late Friday. Bond prices and yields move in opposite directions. 
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