S&P edges higher on gains in bank shares

By Sruthi Shankar

(Reuters) - The S&P 500 edged higher on Monday, helped by gains in bank shares and utility Sempra Energy, as investors looked past a chaotic G7 meeting over the weekend and focused on a historic U.S.-North Korea summit.

President Donald Trump threw the G7's efforts to show a united front into disarray after taking aim at Canadian Prime Minister Justin Trudeau and announcing that he was backing out of the joint communique.

The markets appeared to be calm even as Trudeau spoke of retaliatory measures that Canada would take next month in response to Trump's decision to slap tariffs on steel and aluminum imports from Canada, Mexico and the European Union.

"Markets are generally overlooking negative takeaway following this weekend's G-7 meeting," said Peter Cecchini, chief market strategist at Cantor Fitzgerald in New York.

At 10:02 a.m. EDT the Dow Jones Industrial Average was down 3.86 points, or 0.02 percent, at 25,312.67, the S&P 500 was up 2.91 points, or 0.10 percent, at 2,781.94 and the Nasdaq Composite was up 13.61 points, or 0.18 percent, at 7,659.12.

The biggest driver on the S&P 500 was Sempra Energy, which surged 14.6 percent after two shareholders, Elliott Management and Bluescape Resources Co, recommended six new directors for the company's board and urged a strategic review of its business.

Trump, who is in Singapore for the historic summit with North Korean leader Kim Jong Un, said the Tuesday summit could "work out very nicely" as officials from both countries met to narrow differences on how to end a nuclear stand-off on the Korean peninsula.

Investors are also bracing for monetary policy changes, with three of the world's top central banks - the U.S. Federal Reserve, the European Central Bank and the Bank of Japan - set to meet this week.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

"Investors will be keenly focused on any indications from the Fed on their adherence to their rate hiking path and a possible change in forward guidance language. More importantly, investors will be looking to ECB communication for possible mention of a QE exit plan, particularly as it relates to interest rates," Cecchini wrote.

The S&P financial index was up 0.2 percent, led by gains in U.S. banks.

Shares in Exxon and Chevron slipped 0.4 percent and 0.1 percent, respectively, as oil prices fell nearly 1 percent on rising Russian production and the highest U.S. drilling activity in more than three years.

Envision Healthcare rose 2.7 percent after private equity firm KKR & Co said it would take the physician services provider private in a deal valued at $5.57 billion.

Advancing issues outnumbered decliners by a 1.52-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.73-to-1 ratio on the Nasdaq.

The S&P index recorded 23 new 52-week highs and seven new lows, while the Nasdaq recorded 96 new highs and eight new lows.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)