Stocks finished mixed Monday, recovering from opening lows but faltering in the final hour amid tumbling oil prices, new economic data and a retail giant's soft sales report. Traders were adjusting their portfolios for the end of the month and debating whether to join the recent rally, says Standard & Poor's Equity Research.
On Monday, the Dow Jones industrial average edged down 3.92 points, or 0.03%, to 12,086.34. The broader Standard & Poor's 500 index nudged higher 0.59 points, or 0.04%, to 1,377.93. The tech-heavy Nasdaq composite rose 13.15 points, or 0.56%, to 2,363.77, boosted by Yahoo! (YHOO).
NYSE breadth was slightly positive, with 18 issues advancing for every 15 declining. Nasdaq breadth was 17-14 positive.
Oil prices slid Monday after a modest rebound on Friday. In the energy markets, December West Texas Intermediate crude futures fell $2.39 to $58.36 amid skepticism over OPEC's planned output cuts. The move below $60 acted as a catalyst for funds to sell, says S&P.
Economic figures also remained in focus. Personal income rose 0.5% in September, after an upwardly revised 0.4% gain in August, while spending edged up 0.1%. The core PCE deflator, a key inflation gauge, rose 0.2% on the month, for an annualized pace of 2.4%, down from 2.5% in August.
The report may help dissuade the Federal Reserve from raising or lowering interest rates in the near future, some analysts say. The year-over-year drop in inflation "is likely to encourage the Fed to remain on hold at the Dec. 12 FOMC meeting," says John Ryding, chief U.S. economist at Bear Stearns.
Meanwhile, Richmond Federal Reserve President Jeffrey Lacker said the economy is in a transition back to 2.5% to 3% growth and the creation of about 100,000 jobs a month, following Friday's 1.6% third-quarter economic growth reading. He sounded an upbeat note on the housing market.
Tuesday's calendar holds the release of October consumer confidence data, the Chicago PMI regional manufacturing survey for October, and the third-quarter employment cost index.
On the company side Monday, Wal-Mart (WMT) was lower after the retailer said it sees October same-store sales growth of 0.5%, its smallest gain in nearly six years and below last week's forecast.
In earnings news, Verizon (VZ) said its third-quarter profit rose slightly to $1.92 billion, topping analyst expectations.
Health insurer Humana (HUM) said its third-quarter earnings more than tripled on an increase in revenue.
Radio-station operator Clear Channel Communications (CCU) posted 11% lower third-quarter profit on higher expenses, but still topped Street estimates.
Among companies set to report quarterly results Tuesday are Procter & Gamble (PG) and Eastman Kodak (EK).
Elsewhere, Ford (F) was lower as the automaker said it sees North American production down 8% to 12% for the first half of 2007.
Internet media company Yahoo was higher after Merrill Lynch raised its recommendation on the stock from neutral to buy.
Shares of Yum! Brands (YUM) gained after the fast-food company's KFC unit said its restaurants will all switch to a cooking oil with no trans fat by April 2007.
On the M&A front, France's Schneider Electric agreed to acquire American Power Conversion (APCC) in a cash deal valued at $6.1 billion, or $31 per share.
European markets finished lower amid worries about earnings. In London, the FTSE-100 index fell 34.1 points, or 0.55%, to 6,126.8. Germany's DAX index dropped 4.35 points, or 0.07%, to 6,258.19. In Paris, the CAC 40 index was down 33.8 points, or 0.63%, to 5,362.23.
Asian markets ended lower in the wake of Friday's disappointing report on U.S. economic growth. In Japan, the Nikkei 225 index slid 317.22 points, or 1.9%, to 16,351.85. Korea's Kospi index dipped 12.98 points, or 0.95%, to 1,356.11. In Hong Kong, markets were closed for a holiday after the Hang Seng index on Friday lost 56.19 points, or 0.31%, to 18,297.55.
Treasury yields drifted lower after the PCE data. The 10-year note nudged higher in price to 101-19/32 for a yield of 4.67%, while the 30-year bond rose modestly to 95-18/32 for a yield of 4.78%.