While you were sleeping: Tech share rally boosts Nasdaq, S&P 500

Plus: Activist investor Daniel Loeb pushes for change at Nestlé and Costco buys container shipping rival.

After spending most of the session in positive territory, Wall Street slid in the final half-hour. However, technology stocks rallied as investors awaited US Federal Reserve chairwoman Janet Yellen's semiannual testimony to Congress and the start of the latest quarterly earnings season.

Ms Yellen will testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday. Her comments will be scrutinised for fresh clues on the timing of the Fed's third rate hike this year as well as the unwinding of its balance sheet.

Also, JPMorgan Chase, Citigroup and Wells Fargo are among companies slated to report their latest quarterly results this week.

At the close of trading in New York, the Dow Jones Industrial Average eased 5.82 points, or 0.03%, to 21,408.52 after rising as high as 21,444 mid-session. The Nasdaq Composite Index gained 0.4% to 6176.39. The Standard & Poor's 500 Index added 0.1% to 2427.43.

Tech shares in the S&P 500 climbed 0.8%, with Apple rising 0.6% and Microsoft up 0.8%. Tech is down more than 3% from a peak on June 8 but it is still the best-performing sector in the S&P 500 so far this year with a gain of 18%.

Retailer shares hit
Shares of Abercrombie & Fitch tumbled 21% after the company ended takeover talks.

"After a comprehensive review of all relevant factors, with the assistance of our financial advisor, the A&F board of directors determined that the best path to enhance value for stockholders is the rigorous execution of our business plan," Arthur Martinez, executive chairman, said in a statement.

Reports that Amazon.com was launching a new home-consultation service pressured shares of electronics retailer Best Buy , which offers similar services. Best Buy sank 6.3% while Amazon rose 1.8%.

Other brick-and-mortar retailers slumped. Macy’s shed 7.1%, Gap declined 6.3% and Kohl’s fell 4.2%. 

In bond markets, the yield on the 10-year Treasury note fell to 2.371%. That was down from 2.393% on Friday, which was the highest yield in nearly two months. 

In Europe, the Stoxx 600 Index ended the day with a 0.4% gain from the previous close. The UK's FTSE 100 Index rose 0.3%, France's CAC40 Index increased 0.4% and Germany's DAX Index climbed 0.5%.

Loeb meets Nestlé
Shares of Nestlé rose 1.3% in Zurich. Activist investor Daniel Loeb is keeping up pressure on the world's largest food company by sharing views with the company, of which his Third Point fund now owns a $US3.5 billion stake, as part of a regular dialogue, Reuters reported, citing a source familiar with the matter.

Improved productivity was first on Third Point's wish list, and the source, who declined to be identified, said it was the most important, according to Reuters.

Mr Loeb, dubbed a "constructivist" for his increasingly cooperative approach, first met new chief executive Mark Schneider on June 2, the source said, adding that no other meetings are currently planned before Nestlé's September 26 investor seminar, which Third Point plans to attend, Reuters reported.

In Hong Kong, shares of Cosco Shipping rose after the Chinese state-owned company agreed to buy rival Oriental Overseas for about $HK49.2 billion ($US6.3 billion), which would make it the world's third-biggest shipping line.

"This looks like a happy ending for both parties," Han Ning, China director for Drewry Shipping Consultants, told Bloomberg.

"Cosco can benefit from OOCL's strong presence on routes from the Far East to Australia and to the US. The company's operational efficiency has long been admired by outsiders as well."

Shares of Cosco Shipping climbed 5.4% in Hong Kong, while those of Oriental Overseas soared 20%.