Dow, S&P 500 end at record highs; Apple, Google drag on Nasdaq

US manufacturing activity rises to 55.4 in May from 54.9 in April

The Dow and the S&P 500 finished at record highs again on Monday after a closely watched read on US manufacturing was revised to show more strength than initially indicated.

Industrials and material stocks were among the day's biggest gainers, while the technology sector ended lower, weighed down by big names like Apple and Google.

After hours of confusion, the Institute for Supply Management officially corrected its earlier report to show that the pace of growth in the US manufacturing sector accelerated in May. Wall Street fell initially after the first report, with all 10 S&P 500 sector indexes down for the day at one point.

"The market has lately been focused more on the weak economic news and the bond market, but we saw a reversal of that today with the revised (ISM) numbers. We got a better number and the bonds are selling off," said Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey.

"But it's hard to move the market higher, considering we are fairly fully valued at this point."

The ISM said its index of national factory activity rose to 55.4 last month from 54.9 in April, with the May figure just shy of the 55.5 expected by a Reuters poll of economists. The ISM had initially said the reading came in at 53.2, but it was corrected due to an error in applying the seasonal adjustments. 

The Dow Jones industrial average .DJI rose 26.46 points or 0.16%, to 16,743.63. The S&P 500 .SPX gained 1.40 points or 0.07%, to 1,924.97. But the Nasdaq Composite .IXIC dropped 5.42 points or 0.13%, to 4,237.20.

The Dow ended at a second consecutive record high while the S&P 500 closed at a third consecutive record though volume was still slight, suggesting a lack of conviction behind the advance. Both the Dow and the S&P 500 also set lifetime intraday highs on Monday.

The CBOE Volatility Index .VIX gained 1.6% but was still near the lows not seen since March 2013. The drop in the "fear index" to such lows has many, including Federal Reserve officials, concerned that the market is complacent. 

Apple shares slid 0.7% to $628.65 after the tech giant introduced new operating systems for its Mac computers and mobile devices at its annual Worldwide Developers' Conference.

Google Inc also pressured tech shares, falling 1.3% to $564.34. A censorship watchdog said Google's services were being disrupted in China ahead of this week's 25th anniversary of the 1989 crackdown on pro-democracy demonstrators around Beijing's Tiananmen Square. 

Broadcom Corp BRCM.O was the S&P 500's biggest percentage gainer, jumping 9.3% to $34.84 after the chipmaker said it was looking to sell or wind down its cellular baseband business. 

Ariad Pharmaceuticals Inc shares shot up 4% to $6.94 in heavy volume a day after the company said its drug ponatinib showed anti-tumor activity in patients with advanced gastrointestinal stromal tumors.

Trading volume was around 4.68 billion shares on US exchanges, below last month's average of 5.75 billion, according to data from BATS Global Markets.