Most U.S. stocks fell, following a monthly advance that sent benchmark indexes to records, as energy companies dropped with the price of oil after Saudi Arabia cut the cost of crude sent to American customers.
The Standard & Poor’s 500 Index slipped less than 0.1 percent to 2,017.81 at 4 p.m. in New York as about five U.S. stocks fell for every four that rose. The Dow Jones Industrial Average lost 24.28 points, or 0.1 percent, to 17,366.24. The Nasdaq Composite Index rose 0.2 percent to the highest level since March 2000. Almost 7 billion listed shares changed hands in the U.S., 9 percent higher than the three-month daily average.
“The market was trading in a range before oil went south on Saudi Arabia’s announcement that it’ll temper U.S. prices,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview. “The market made a quick reversal back to elevated levels, so that’s always a concern, and perhaps you’re seeing a bit of profit taking and resistance to start the week.”
The S&P 500 has rebounded 8.3 percent from a six-month low on Oct. 15, fueled by better-than-forecast economic growth and improving earnings reports. The gain has pushed the index to trade at 16.8 times the members’ projected profit, near its highest multiple since 2009.
Both the S&P 500 and the Dow closed at all-time highs last week amid optimism the Bank of Japan’s stimulus will fill some of the gap left by the end of Federal Reserve bond buying.
Manufacturing data today added to evidence that the world’s largest economy can sustain a withdrawal in central-bank stimulus. The Institute for Supply Management’s factory index increased to 59 in October, matching August as the highest since March 2011, after 56.6 the prior month. Readings above 50 indicate expansion. A gauge of production was the strongest in a decade.
A slowdown in Chinese manufacturing highlighted diverging growth outlooks for America, Asia and Europe. The Chinese government’s Purchasing Managers’ Index released over the weekend was at 50.8 in October, trailing the 51.2 median estimate of analysts in a Bloomberg News survey and compared with September’s 51.1. Readings above 50 indicate expansion.
Other U.S. releases this week will probably show services industries grew last month, while the unemployment rate remained at a six-year low.
Earnings reports may provide further clues to the health of the U.S. economy. American International Group Inc., Time Warner Inc., and Walt Disney Co. are among more than eighty S&P 500 companies posting financial results this week. Analysts predict profit for members of the gauge rose 8 percent in the third quarter, higher than the 4.9 percent growth projected a month ago. Sales probably increased 3.6 percent in the three-month period, the estimates show.
Seven out of 10 major industries in the S&P 500 rose, with technology and consumer-staples companies leading gains.
Energy shares in the S&P 500 decreased 1.7 percent as a group, reversing an earlier gain of 0.8 percent. Exxon Mobil Corp., Chevron Corp. and Schlumberger Ltd. lost at least 1.5 percent to pace declines in 38 of the 43 stocks.
West Texas Intermediate oil dropped to the lowest level in more than two years after Saudi Arabia reduced the cost of its crude to U.S. customers in the face of soaring North American output. Futures tumbled 2.2 percent to close at $78.78 a barrel in New York. Saudi Arabian Oil Co. cut prices for all grades to the U.S., the company said today in an e-mailed statement.
Apple Inc. climbed 1.3 percent to $109.40. The company is holding calls with investors today to discuss a bond sale, according to a person familiar with the matter.
The world’s most valuable technology company hired Goldman Sachs Group Inc. and Deutsche Bank AG to organize the calls, said the person, who asked not to be identified because they’re not authorized to speak about it. A London-based spokesman for Apple declined to comment on whether the securities would be denominated in euros.
Sapient Corp. jumped 42 percent to $24.60. Publicis Groupe SA, a French advertising company, agreed to pay $3.7 billion for Boston-based Sapient, which owns digital advertising agency SapientNitro. Sapient shareholders will get $25 in cash for each share they own.
Covance Inc., a provider of contract research services for drug companies, surged 26 percent to $100.57. Laboratory Corp. of America Holdings will buy the company for about $6.1 billion, or cash and stock valued at $105.12 a share, according to a statement today.
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