MARKET SNAPSHOT: U.S. Stocks Steady; Michael Kors Drops

By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

UBS strategists: Now isn't the time to bail out of stocks

NEW YORK (MarketWatch) -- U.S. stocks steadied after dipping into negative territory on Monday as investors remained cautious in light of last week's selloff on Wall Street and geopolitical concerns.

Earlier, investors took comfort from news that Portuguese central banks unveiled a plan to rescue troubled Banco Espírito Santo, but gains have been muted.

The S&P 500 (SPX) was flat at 1,925.60. The Dow Jones Industrial Average (DJI) fell 16 points, or 0.1%, to 16,476.00. The Nasdaq Composite (RIXF) rose 6 points, or 0.1% to 4,358.24.

Follow MarketWatch's live blog of today's stock-market action.

The data calendar is empty for Monday and few earnings reports are being reported.

Portugal's central bank late Sunday announced a rescue plan of Banco Espírito Santo, in which the bank would be split into "good" and "bad" banks with the "good" bank receiving EUR4.9 billion in state funds. The upheaval surrounding the bank has some investors worried about renewed turmoil for Europe's banking system. That news drove a rally in Portugal stocks and also inspired some gains in Europe .

With no U.S. data on the docket, investors focused on last week's performance, which included the biggest weekly drop in two years for the S&P 500 (SPX). Nonfarm-payroll data missed forecasts, but the gains provided more evidence that the economy continues to gain momentum, which in turn makes it more likely the Federal Reserve could raise interest rates sooner than expected.

Low volumes

Uri Landesman, president of Platinum Partners, a New York-based hedge fund, hopes the market finally cracks here. Landesman has been calling for a 10%-15% correction for some time.

"This week's action will be very important. If we snap back and rally it would mean that the bulls are in control. If not, then it would mean that buyers are waiting for markets to go a lot lower before stepping in. In this case, markets will continue to sell."

"I think investors in general are very cautious at the moment. We don't believe we reached the top of the bull market, but there are some worrying aspects. For example, in the past few months, it has mostly been retail money rather than institutional money pouring into the stocks and that is normally associated with the end of the bull market."

Readings on services and factory orders are due Tuesday, while data on trade and consumer credit follow later in the week. Read: Paltry credit-card debt growth signals restrained consumers

Mark Haefele and Kiran Ganesh of UBS Wealth Management wrote that investors should not be panicking because valuations are not at extremes, nor are investors "exuberant."

"With U.S. GDP growth still on track, the Fed remaining accommodative, and cash still on the sidelines, now is not the time for investors to head to the exit," said Haefele, global chief investment officer, and Ganesh, cross-asset strategist, in a piece published on CNBC's website. Also read Need to Know for Monday: Traders put big hedges in places as markets set up for a rebound

Michael Kors Holdings Ltd. (KORS) fell 6.8% as investors were worried about increased markdowns that were a drag on the retailer's margins in its fiscal first quarter.

Cardinal Health Inc. (CAH) also reported profits that topped estimates, but shares fell 4.2%.

Amgen Inc. (AMGN) rose 1.1% after the biopharmaceutical company said a Phase 3 clinical trial for a late-stage treatment of multiple myeloma was successful.

Mobileye N.V. (MBLY) rose 7.8% after soaring 48% on Friday, when the company debuted on a stock market. For more on today's notable movers, read our Movers & Shakers column.

Berkshire Hathaway Inc.(BRKA) (BRK/A) shares rose 2% ahead of quarterly results due late Friday.

In overseas markets, Asian stocks had a mixed session, with the Shanghai Composite Index up 1.7% and the Nikkei 225 index off 0.3%. Gold prices (GCU4) edged down, while oil (CLU4) was flat and the dollar (DXY) recouped some losses from last week.

More must-reads from MarketWatch:

History says don't count on a big correction soon

Three market signs point to 20% tumble for U.S. stocks

Warning: That plunge in stocks is just the beginning

Subscribe to WSJ: http://online.wsj.com?mod=djnwires