LONDON: U.S. stocks finished Monday’s range-bound session marginally higher, as steep losses for energy stocks, following a drop in oil prices, kept a lid on the main indexes.
The S&P 500 SPX, +0.03% closed less than a point higher at 2,033.66, with five of its 10 main sectors ending lower. The S&P 500 energy sector was down 1.9%, dragging the broader index lower.
Morgan Stanley MS, -4.80% was one of the biggest decliners among S&P 500 stocks, skidding 4.8% after the New York–based bank’s third-quarter earnings and revenue badly missed analysts’ estimates.
The Dow Jones Industrial Average DJIA, +0.08% added 14.57 points, or less than 0.1%, to settle at 17,230.54, with half of the blue-chip companies closing higher. The Nasdaq Composite COMP, +0.38% ended the day up 18.78 points, or 0.4%, at 4,905.47.
Stocks had switched between small gains and losses in earlier activity, but returned to positive territory by late afternoon.
“This earnings season is going to be tough. We have already been seeing a lot of misses and downbeat guidance. And when there are growth fears, investors begin to questions if the market deserves current price-to-earnings ratios of 16,” said Joseph Saluzzi, co-founder and co-head of equity trading at Themis Trading.
Saluzzi said worries about earnings growth could send the market back to August lows. “I would not be surprised to see the Fed actually come and do another round of [quantitative easing] if the stock market falls considerably,” he said.
Data pointing to deceleration by the world’s second-largest economy added to a cautious mood in global equity markets. Chinese economic growth slowed to 6.9% in the third quarter, below Beijing’s 7% target for the first time since 2009, but above forecasts for growth of 6.8%. Asian markets closed mixed in the wake of the data, while European equities SXXP, +0.31% were mostly flat, though commodities-related stocks fell.
