By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks were little changed on
Monday afternoon, with the S&P 500 pausing from its record
climb, as Wall Street considered earnings and Tuesday's delayed
release of the nonfarm-payrolls report for September.
"This has been a year of significant multiple expansion," said
Paul Karos, a senior portfolio manager for Whitebox Mutual Funds,
of the price-earnings ratio of U.S. equities. But since that
expansion has not coincided with a broad-based earnings revision
upward, "it would not be surprising to see equity markets take a
breather," given the market's more than 20% rise so far this year,
he said.
"We can continue to grind higher, but it's a grind, the next
sustainable leg would probably need to come from upwardly revised
earnings estimates, that could be hard to come by," Karos
added.
Wavering between small gains and losses, the Dow Jones
Industrial Average (DJI) was lately down 4.76 points at
15,394.89.
McDonald's Corp. (MCD) fell 0.7% after the fast-food chain
reported sales below expectations. Another Dow component, AT&T
Inc., (T) climbed 1.2% after the telecommunication company agreed
to sell or lease 9,700 wireless towers.
J.P. Morgan Chase & Co. (JPM) was little changed after the
bank reportedly agreed to pay $13 billion to halt U.S. civil
investigations into its mortgage-bond sales.
The S&P 500 index (SPX) held steady at 1,744.51, with health
care losing the most ground and telecommunications faring best
among its 10 sectors.
Gannett Co. Inc. (GCI) shares lost 4.6% after the newspaper
chain reported a 4% decline in quarterly revenue. Hasbro Inc. (HAS)
gained 5.6% after the toy seller reported third-quarter results
that beat Wall Street's expectations.
The Nasdaq Composite (RIXF) added 8.64 points, or 0.2%, to
3,922.88.
Decliners moved just ahead of advancers on the New York Stock
Exchange, where 317 million shares traded as of 1:44 p.m. Eastern
time. Composite volume neared 1.8 billion shares.
Equities improved after the National Association of Realtors
reported existing U.S. home sales fell 1.9% in September due to
rising prices and mortgage rates.
Gold futures (GCZ3) rose $1.20 or 0.1%, to $1,315.80 an ounce,
and crude futures (CLX3) lost $1.58, or 1.6%, to $99.23 a barrel on
the New York Mercantile Exchange.
The dollar(DXY) gained against the currencies of major U.S.
trading partners, including the euro (EURUSD) and the yen
(USDJPY).
The yield on the 10-year Treasury note (10_YEAR) used in
figuring mortgage rates and other consumer loans rose 3 basis
points to 2.615%.
"Both the economy and earnings appeared to have had good
momentum going into the fourth quarter. However, analysts will
still need to assess how much the (government) shutdown hurt the
economy," noted David Kelly, chief global strategist at J.P. Morgan
Funds, in emailed commentary.
The global economy is "still on the mend in the face of the
easiest monetary policy ever implemented by developed-nation
central banks. As the economy improves and earnings rise, this aid
will gradually be reduced, boosting interest rates. Despite recent
stock-market gains, such an environment still supports the idea of
an overweight to equities relative to fixed income around the
world," wrote J.P. Morgan Funds' Kelly.
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