Stocks rebound to end mostly higher

NEW YORK - It was a roller coaster ride for the stock market on Monday that ended with major U.S. indexes closing mostly higher.

Traders were pulled in multiple directions. Stocks opened higher, fell in the afternoon, then mostly rose again in the last hour of trading.

Bank stocks fell after Bank of America (BAC) said a financial error would force it to cancel its stock buyback plan and dividend increase, while health-care stocks rose after U.S. drug giant Pfizer (PFE) renewed its pursuit of a merger with British rival AstraZeneca (AZN) Formerly highflying technology stocks fell again, dragging the Nasdaq composite index into the red.

The Standard & Poor's 500 index rose 6.03 points, or 0.3 percent, to close at 1,869.43. The Dow Jones industrial average rose 87.28 points, or 0.5 percent, to end at 16,448.74 and the Nasdaq edged down 1.16 points, or 0.03 percent, closing at 4,074.40. The Nasdaq erased most of a 61-point loss.

Bank of America sank $1, or 6.3 percent, to $14.95 after it unexpectedly announced it would suspend its stock buyback program and dividend increase. The bank discovered an error in how it calculates its capital ratio, a crucial measure of its strength. The Federal Reserve asked the bank to put its buyback and dividend increase on hold until the error was fixed.

Goldman Sachs (GS) and Citigroup each 1 percent following BofA's announcement. JPMorgan Chase (JPM) edged down 0.4 percent.

High-risk technology stocks were another area of weakness Monday as investors continue to cut their exposure to high-growth names and turn their focus to larger dividend-paying companies. Amazon (AMZN) fell $7.25, or 2.5 percent, to $296.58 after falling 10 percent on Friday. Netflix (NFLX) lost $7.87, or 2.4 percent, to $314.21 and Facebook (FB) fell $1.57, or 2.7 percent, to $56.14.

In contrast, "old" technology companies such as Microsoft (MSFT), Apple (AAPL) and IBM (IBM), which have more mature businesses and pay quarterly dividends, rose 2 percent or more Monday.

High-growth technology and biotechnology stocks have been falling for several weeks now. The Nasdaq is down 3 percent in April, while the S&P 500 and Dow are roughly flat.

Traders say the selling has been coming from large investors, who have been moving out of high-growth stocks and into safer investments. The Russell 2000, an index made up mostly of smaller companies, is down 4.8 percent this month.

"When you have so many investors doing the same thing at the same time, you get these exaggerated moves in some of these stocks," said Ian Winer, director of equity trading at Wedbush Securities.

Health-care stocks did well after drug giant Pfizer renewed its push to buy British drug company AstraZeneca for $100 billion. The deal would be the latest big merger in the drug industry in recent weeks, if it happens. AstraZeneca jumped $8.35, or 12 percent, to $77.01. Pfizer rose $1.29, or 4.2 percent, to $32.04.

The health-care industry has seen several big deals this year. Just in the last two weeks, Zimmer Holdings (ZMH) announced it would buy medical device maker Biomet for $13.4 billion, Valeant Pharmaceuticals said it would bid for Botox maker Allergan (AGN) for $50 billion and Novartis (NVS) agreed to buy GlaxoSmithKline's (GSK) cancer drug business for $16 billion.

"These deals have a halo effect on the rest of the market, particularly in the industry where it happens, because investors expect it means more deals are on their way," said Quincy Krosby, market strategist with Prudential Financial.

Investor now turn their focus to the Federal Reserve, which starts a two-day policy meeting on Tuesday. The central bank is expected to further dial back its economic stimulus by reducing its monthly bond purchases to $45 billion. Those monthly purchases, which totaled $85 billion in December, have helped hold down long-term interest rates for consumers and businesses.

In other markets, bond prices fell, pushing the yield of the 10-year U.S. Treasury note up to 2.70 percent from 2.66 percent Friday. Gold was little changed at $1,299 an ounce.