By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- The U.S. stock market finished
Tuesday's choppy session mostly lower, as steep losses in energy
companies' stocks weighed on the main benchmark.
The Dow Jones Industrial Average swung between small gains and
losses, but managed to eke out a gain by the end.
Markets have been hobbled by combination of worries about oil
and concerns about global growth, namely in Europe.
Indeed, the European Commission cut its forecast for growth
domestic product for the 18-country eurozone region to 0.8% this
year, from a previous forecast of 1.2%, in the spring. The
assessment comes ahead of Thursday's European Central Bank
meeting.
The price of oil dropped to levels not seen in three years after
Saudi Arabia cut oil prices for the U.S., in a move meant to remain
competitive amid booming oil production in the U.S. Energy
companies were pounded for the second straight day, with the sector
making up half of all the losses on the S&P 500.
The S&P 500 (SPX) finished 5.71 points, or 0.3%, lower at
2,021.10.
The Dow Jones Industrial Average (DJI) gained 17.50 points, or
0.1%, to 17,383.84.
The Nasdaq Composite (RIXF) shed 15.27 points, or 0.3%, to
4,623.64.
Weak oil, weak Europe: Oil prices, already falling, didn't react
well to the EU growth assessment. The U.S. oil benchmark continued
to slide Tuesday, dropping more than to 2% (and as much as 3.7% at
points), and Brent crude also was under pressure after Saudi Arabia
deepened price cuts for the U.S. market. Strategists said the move
will pave the way for further falls in oil prices, and possibly
pressure American energy producers.
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management, said that there is a fatigue in the market as not all
data points support sharp rally seen since mid-October.
"The next jobs report will be interesting and with the earnings
mostly behind us, investors will focus on economic data and the ECB
meeting," Wiegand said.
Referring to falling oil prices, Weigand said it will be a
negative for the market if it results in deflationary pressures. At
this point, it is unclear how much the volatility in commodity
prices is due to structural issues and a stronger dollar and how
much of it is falling demand, he added .
Meanwhile, U.S. voters are headed to the polls on Tuesday to
decide closely contested midterm election races. See: A breakdown
of how the market performs after midterm elections
In U.S. economic news, the nation's trade deficit jumped in
September to the highest level since the late spring. The
surprising spike in the trade deficit is likely to reduce
third-quarter growth when the government revises the report later
this month.
St. Louis Fed President James Bullard on Tuesday said that the
U.S. economy is on track to grow at a 3% annual rate over the next
14 months, which should allow the Federal Reserve to move ahead
with plans to hike short-term interest rates.
Alibaba, Herbalife among stocks to watch: Alibaba Group Holding
Ltd. (BABA) reported sales that beat forecasts, sending shares up
4.2%.
Michael Kors Holdings (KORS) shares slid 8.4% after the retailer
projected a disappointing outlook for the current quarter, which
includes the holiday shopping season, overshadowing its relatively
robust quarterly results.
Shares of Herbalife Ltd. (HLF) plummeted 21% after the company
reported disappointing third-quarter results.
RetailMeNot Inc. (SALE) sank 30% after posting strong results,
but warning that much of its growth has been from "lower monetizing
mobile visits."
Sprint Corp. (S) slid 16% after results fell short of Wall
Street expectations.
(Read more about the day's notable stocks in Movers &
Shakers column:
http://www.marketwatch.com/storyno-meta-for-guid.)
Other markets: Europe stocks erased gains after news of the cut
in eurozone growth forecasts, while in Asia, the Nikkei 225 surged
2.7%. Gold prices (GCZ4) were moderately lower, while the
dollar(USDJPY) was taking a breather from rapid gains against the
yen.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires