NEW YORK - Concerns over high stock prices and global politics continued to plague markets Monday as major stock indexes ended with slight losses in another day of choppy trading. Pro-democracy protests in Hong Kong, a major world financial center, added to the host of political concerns on investors' minds.
It could have been worse. The Dow Jones industrial average sank 178 points in the opening minutes, a sudden drop of 1 percent, but then it climbed back.
"You have a ton of risks that have brought back in the market's focus," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. "There's just a heck of a lot of uncertainty right now."
The Dow lost 41.93 points, or 0.2 percent, to close at 17,071.22. The Standard & Poor's 500 index lost 5.05 points, or 0.3 percent, ending at 1,977.80. The Nasdaq composite slipped 6.34 points, or 0.1 percent, to finish at 4,505.85.
DreamWorks Animation (DWA), the studio behind "Shrek" and "Madagascar," soared 26 percent following reports that Japan's SoftBank (SFTBF) is in talks to buy the company. DreamWorks gained $5.82 to $28.18.
The market has turned choppy in recent weeks, flipping between solid gains and steep losses. Since hitting a record on Sept. 18, the S&P 500 has slipped 1.7 percent. Coming after a calm summer, the slide has set off a flurry of worried calls to brokerages.
John Canally, chief economic strategist at LPL Financial in Boston, said many investors think the market has gone too long without a major fall. "I can't tell you how many calls we're getting now asking, 'Is this it? Is this the big one?'" he said.
One reason for the recent turbulence is that the stock market appears "priced for perfection," McMillan said. It's an increasingly common saying among investors, and it means the S&P 500 is so high that corporate profits and the economy have to keep improving just to sustain current prices. Good news isn't enough.
"The question is no longer, are we doing well? It's, are we doing even better?" McMillan said. "When you pay for perfection, anything shy of that is a disappointment."
At current prices, investors are paying $16.69 for every dollar in company earnings, according to data from FactSet. That's 10 percent above the long-term average. "There's a certain amount of faith needed at this level," McMillan said.
Traders have pushed the stock market lower despite a string of encouraging economic news. The latest came from the Commerce Department, which reported on Monday that consumer spending rose 0.5 percent in August from the previous month. Auto sales made up about half of the increase. It was further evidence that the U.S. economy is on solid footing heading into the end of the year.
"The consumer is back in the driver's seat where they should be, moving the economy ahead at what looks like a strong 3 percent pace," said Chris Rupkey, chief financial economist at the Bank of Tokyo in New York, in a note to clients. "Somebody please tell the stock market. Can't ask more of the economy than that."
Pro-democracy protests in Hong Kong escalated Monday, raising concerns that a crackdown by the Chinese government could make the situation worse. Thousands of people took to the streets over the weekend in a challenge against Beijing's decision to limit political reforms. Police fired tear gas and detained 78 protesters.
The situation in Hong Kong weighed on its main stock index, the Hang Seng, which closed with a loss of 1.9 percent. Japan's Nikkei 225 index rose 0.5 percent, and China's Shanghai Composite added 0.4 percent.
Major markets in Europe sank. France's CAC-40 fell 0.8 percent, while Germany's DAX fell 0.7 percent. The FTSE 100 of leading British companies was flat.
Back in the U.S., NiSource (NI) surged 6 percent after saying that it plans to split off its natural-gas pipeline business into a stand-alone company. NiSource expects that new company, Columbia Pipeline Group, to be listed on the New York Stock Exchange by the middle of next year. NiSource climbed $2.26 to $40.84.
Prices for U.S. government bonds rose, sending yields lower. The yield on the 10-year Treasury note fell to 2.48 percent from 2.53 percent late Friday.
In commodities trading, the price of gold edged up $3.40 to settle at $1,218.80 an ounce, silver rose three cents to $17.57 an ounce and copper rose two cents to $3.06 a pound.
The price of oil rose amid signs that U.S. refineries are demanding more crude oil to boost output of gasoline. Benchmark U.S. oil gained $1.03 to $94.57 a barrel. Gasoline futures increased 3.44 cents to $2.696 a gallon.
Brent crude, a benchmark for international oil, rose 20 cents to $97.20 a barrel in London.
In other energy futures trading on NYMEX, heating oil was flat at $2.70 a gallon and natural gas rose 12.5 cents to $4.154 per 1,000 cubic feet.