By Anora Mahmudova and Barbara Kollmeyer, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market inched modestly higher on Monday, with the S&P 500 hitting an intraday record after a tenuous start to the week.

Trading activity, however, has been relatively tempered.

Investors assessed a batch of mixed economic reports and earnings: the ISM manufacturing survey index rose in October, but the final PMI index and construction spending fell. Manufacturing data from Europe and China were disappointing.

Monday's tepid trading action is in contrast with Friday's, when the S&P 500 and Dow industrials soared into record territory, getting a fresh push after the Bank of Japan surprised markets with an unexpected stimulus plan.

Still, even at today's pace, the S&P 500 (SPX) was slightly higher, and closing at this level would mean new record. The Nasdaq Composite (RIXF) edged up.

Meanwhile, the Dow Jones Industrial Average (DJI) drifted lower, hitting an intraday record of 17, 398.54, registered earlier today, before retreating. On Friday, the Dow established a new closing record of 17.390.52.

Kate Warne, investment strategist at Edward Jones, said that after a stronger October, it's not surprising to see sideways trade.

"Typically, not all economic data will be stronger than expected. The mixed reports are normal, as monthly data tend to be volatile. But overall trend in the U.S. is still much more robust than in the rest of the world," Warne said.

"The decision by the Bank of Japan [on Friday] to increase stimulus will have a longer effect on markets as it reminds investors that they are concerned with deflation and will not give up fighting slow growth," she added.

Earnings support stocks: While U.S. stocks caught a good tailwind from more central-bank stimulus, Dan Greenhaus, chief strategist at BTIG, said in note that earnings should help stocks to maintain gains. Earnings are growing at a nearly 10% pace, and revenue is up 4% to 5%, beating expectations, based on the nearly 375 S&P 500 companies that have reported, he noted. Read: Forget the BoJ! Earnings hold the key for U.S. stocks.

"As we've said for several quarters now, that is pretty darn good and should be enough to support higher stock prices," he said. Need to Know: Look to China as post-QE blues tangle with V-bottom bliss

Analysts said markets will be keeping a close eye on Tuesday's midterm elections, with a survey by The Wall Street Journal/NBC News showing Republicans could control Congress by a slim margin. Also read: 21 stocks that would win with a Republican Congress

In economic news, U.S. manufacturing companies expanded at a faster rate in October as new orders rose to the second highest level in five years, a survey of executives found.

The report contradicts the final reading of Markit's U.S. manufacturing purchasing managers index, which was 55.9 in October, down from the flash reading of 56.2 and well below September's 57.9. The final reading is the lowest since August.

Outlays for U.S. construction projects fell unexpectedly in September to a seasonally adjusted annual rate of $950.9 billion, the U.S. Commerce Department reported Monday.

Looking further ahead, this is the week for the monthly U.S. jobs report, due Friday. On Thursday, markets will be watching a meeting of the European Central Bank.

Stocks to Watch: Shares of Sapient Corp. (SAPE) surged 41% after French advertising group Publicis SA announced a $3.7 billion-all-cash deal to buy the U.S. company. Publicis will pay $25 for each Sapient share, which represents a 44% premium to the closing price of Sapient on Oct. 31.

Laboratory Corp. of America Holdings (LH) said it would buy Covance Inc. (CVD) for $5.9 billion in cash and stock. Laboratory shares dropped 7.7%, making it the biggest loser on the S&P 500. Covance shares jumped 25%.

Apple Inc. (AAPL) is planning an investor call on Monday ahead of a potential bond sale, The Wall Street Journal reported, citing a banker working on the deal.

Argentina has banned Procter & Gamble Co. (PG) from doing business in that country, alleging that the consumer products giant has committed tax fraud, media reports said Monday. The company told the BBC it was working to understand and resolve those allegations.

Sysco Corp. (SYY) said it no longer expects its acquisition of US Foods to close this year, as it reported quarterly earnings, while Herbalife Ltd. (HLF) and AIG Inc. (AIG) to report after the close.

Dollar above Yen113: The dollar (USDJPY) shot 1% higher against then yen on Monday, trading around Yen113.42, while gold (GCZ4) continued to drift lower and oil (CLZ4) inched up. Europe stocks drifted lower across the board. Asia markets were mixed, and Tokyo was shut for a holiday.

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