By Anna Isaac and David Benoit 

U.S. stocks swung between small gains and losses Monday as investors assessed the slowing pace of new coronavirus infections, potential complications surrounding fresh federal stimulus spending plans and escalating tensions with China.

The Dow Jones Industrial Average climbed 0.5%, or 130 points, buoyed by shares of Boeing and Caterpillar. The S&P 500 slipped 0.4%, stalling after a week during which the benchmark index advanced 2.5%. The Nasdaq Composite dropped 1.4%, dragged lower by shares of the big technology giants that have pushed the stock market higher since late March.

Investors are attempting to gauge whether steps taken by President Trump over the weekend to offer aid to American households will go into effect or potentiall spur a new round of Congressional dealmaking.

Mr. Trump on Saturday directed the federal government to provide $300 a week in additional payments to the unemployed. That was one of four executive orders aimed at extending relief spending after the White House and lawmakers on either side of the aisle in Congress failed to reach an agreement on a broader stimulus package. The president's directives are already facing criticism for not offering sufficient aid, and for potentially breaching congressional spending authority.

"The legal basis for Trump to do much here with executive orders is shaky. He won't get far," said Holger Schmieding, chief economist at Berenberg Bank. Still, with the coming November elections, politicians are likely to work out a deal that offers aid to voters, he said. "It's highly likely to have a deal this week that extends support to the end of the year," Mr. Schmieding said.

Treasury Secretary Steven Mnuchin expressed hope during an interview on CNBC Monday that a compromise could be reached with Democratic leaders this week.

The U.S. also reported its lowest number of new coronavirus cases in nearly a week, as new infections in some parts of the country trended down. Still, the country surpassed 5 million confirmed cases, with 13 states seeing an uptick in the number of new infections. Economists pointed to the slowing new case numbers as a signal that moderate measures might make it possible to contain the virus, without again crimping economic activity severely.

Market sentiment was briefly knocked by the Chinese foreign ministry's comments that it will impose fresh sanctions against several senators including Ted Cruz and Marco Rubio over Hong Kong issues. That would mark the latest barb exchanged between the two countries with relations deteriorating in recent months.

"I'm not surprised we're seeing yo-yo like moves at the moment reflecting short-term developments like the sanctions," said Ella Hoxha, senior investment manager at Pictet Asset Management.

The outcome from talks scheduled between top U.S. and Chinese officials on Aug. 15 about the phase-one trade deal are viewed as crucial by investors, she said. "That's more important for markets than the sanctions, which seem much more of a tit-for-tat diplomatic spat rather than something with deep economic implications."

Shares of Twitter rose 2.4%. The social-media company has had preliminary talks about a potential combination with the popular video-sharing app TikTok in the U.S., The Wall Street Journal reported Saturday. Microsoft, which has been viewed as the lead bidder, was one of the few stocks falling in the Dow industrials, down 1.9%.

Shares of Simon Property Group rose 6.4%. The largest mall owner in the U.S. has been in talks with Amazon.com to take over space left by ailing department stores for its fulfillment centers.

Casino operator MGM Resorts International spiked about 14% after Barry Diller's IAC/InteractiveCorp disclosed it had acquired a 12% stake, worth about $1 billion. Other casinos also rose on the investor's take that MGM would rebound from the coronavirus.

Other signs show there remains concern that government actions around the world to fight the pandemic's impact will eventually fan inflation.

Gold rose 1.6% to $2060.40 a troy ounce, and silver rose 6.8% to $29.39 a troy ounce. Both metals had posted nine straight weeks of gains heading into this week.

Brent crude, the international oil benchmark, rose 1.5% to $45.07 a barrel.

In bond markets, the yield on the benchmark 10-year U.S. Treasury ticked down to 0.552%, from 0.562% Friday.

Overseas, Hong Kong's Hang Seng Index dropped 0.6%. Political tensions in the region continued to simmer as Jimmy Lai, the outspoken publisher of Hong Kong's widely read pro-democracy newspaper, was arrested Monday on suspicion of foreign collusion under a new national security law. That step marks an expansion of Beijing's crackdown on the former British colony.

The pan-continental Stoxx Europe 600 ticked up 0.3%. The Shanghai Composite Index climbed almost 0.8%, while South Korea's Kospi rose 1.5%.

Write to Anna Isaac at anna.isaac@wsj.com and David Benoit at david.benoit@wsj.com

(END) Dow Jones Newswires

August 10, 2020 11:24 ET (15:24 GMT)

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