By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks fell 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.
After wavering between small gains and losses, the Dow Jones
Industrial Average (DJI) was lately down 20.69 points, or 0.1%, at
15,378.96.
McDonald's Corp. (MCD) fell 0.9% after the fast-food chain
reported sales below expectations. Another Dow component, AT&T
Inc., (T) climbed 1.4% after the telecommunication company agreed
to sell or lease 9,700 wireless towers.
J.P. Morgan Chase & Co. (JPM) lost 0.2% 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) declined 2.36 points, or 0.1%, to
1,742.14, with health care losing the most ground and
telecommunications faring best among its 10 sectors.
J.C. Penney Co. (JCP) shares dropped 10% after the retailer last
week denied two anonymous social-media attacks that said the
company had retained a bankruptcy lawyer and had lost access to
credit in Canada.
Gannett Co. Inc. (GCI) shares lost 3.9% after the newspaper
chain reported a 4% decline in quarterly revenue. Hasbro Inc. (HAS)
gained 5.2% after the toy seller reported third-quarter results
that beat Wall Street's expectations.
The Nasdaq Composite (RIXF) shed nearly 1 point to 3,913.43.
For every three shares rising, roughly four fell on the New York
Stock Exchange, where 368 million shares traded as of 2:40 p.m.
Eastern time. Composite volume neared 2.1 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 $1.59, or 1.6%, to $99.22 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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