By Will Horner

U.S. stocks edged lower Monday, as rising shares of some tech and consumer-discretionary companies weren't enough to buoy major indexes.

The Dow Jones Industrial Average fell 81 points, or 0.3%, to 25363 soon at about 10 a.m. Eastern, while the S&P 500 dropped 0.37%. The Nasdaq Composite was roughly flat, losing 0.1% as the tech-heavy index looked to snap a three-session losing streak.

Earlier, tech companies in the S&P 500 rose 0.5%, while consumer-discretionary stocks added 0.4%, helping to pare those sectors' deep losses for the month. A mix of some upbeat earnings news and an improving economic outlook in China helped reinvigorate two sectors of the stock market that have suffered heavy selling pressure over the last three previous sessions.

The gains in the U.S. followed advances around most of the rest of the world after proposed Chinese tax cuts drove bumper gains for Chinese equities that fed into milder increases for European markets.

The Shenzhen A Share index was up nearly 5% while the Shanghai Composite was up around 4%, continuing a rally in Chinese stocks that began at the end of last week. Japan's Nikkei was up 0.4%.

The Stoxx Europe 600, meanwhile, was little changed. The Italian FTSE MIB was up 0.3% and yields on the nation's bonds fell after an Italian credit-rating downgrade came, in line with expectations. Yields move inversely to prices.

In China, the strong gains for stocks were fueled by a proposed cut in personal income tax Saturday, said Geoffrey Yu, head of the U.K. investment office at UBS Global Wealth Management.

"When it comes to thinking about Chinese stimulus, the government is finally starting to get the message and is focusing on tax reform and away from investment," Mr. Yu said. "If this can help the Chinese household it doesn't just help China, it helps the world."

The measures could boost retails sales by about 1%, said Jim Reid, an analyst at Deutsche Bank, in a note to clients, adding that the bank believes they are part of a series of tax cuts.

"These measures would help to offset the downside risks from the trade war, and keep growth in 2019 above 6%," Mr. Reid said.

In the week ahead, attention will be on an investment conference in Saudi Arabia taking place Tuesday. U.S. Treasury Secretary Steven Mnuchin, JPMorgan CEO James Dimon and BlackRock head Larry Fink, among others, have pulled out of the so-called "Davos in the desert" due to the killing of Saudi journalist Jamal Khashoggi in the nation's consulate in Istanbul.

--Michael Wursthorn contributed to this article.

(END) Dow Jones Newswires

October 22, 2018 10:24 ET (14:24 GMT)

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