NEW YORK - Lower oil prices and more gloomy economic news from Europe tugged the U.S. stock market to a slight loss on Monday.
Companies whose fortunes tend to follow global economic growth fared the worst, as shares of oil companies and material producers dropped 2 percent. Those industries that depend on the U.S. economy, including telecoms, held steady.
"What we're seeing is a market trying to find its footing right now," said Kevin Mahn, president and chief investment officer of Hennion & Walsh Asset Management.
The Standard & Poor's 500 index closed with a loss of 2.95 points, or 0.2 percent, to close at 1,961.63.
The Nasdaq composite rose 2.22 points, a fraction of a percent, ending at 4,485.93, while the Dow Jones industrial average picked up 12.53 points, or 0.1 percent, to finish at 16,817.94.
The news out Monday was mostly glum. Business confidence in Germany, Europe's largest economy, declined for a sixth straight month, and Goldman Sachs (GS) said slowing economic growth around the world led it to lower its forecast for crude oil prices.
The European Central Bank released the results of its stress tests of Europe's 130 biggest banks and said 13 of them still needed to raise more capital to survive a severe downturn. The bank that did worst in the tests, Italy's Monte dei Paschi di Siena, saw its shares plunge 18 percent. Those that passed, however, traded higher.
Germany's DAX lost 0.9 percent. France's CAC 40 dropped 0.8 percent, and Britain's FTSE 100 dipped 0.4 percent.
Last week, the U.S. stock market turned in its best performance in nearly two years. The rise helped the S&P 500 regain ground from four weeks of losses. The benchmark index had dropped almost 6 percent by mid-October, but is now down just a fraction -- 0.5 percent -- for the month.
What's behind the recent turbulence?
David Joy, chief market strategist at Ameriprise Financial, thinks the volatility is tied to actions by the world's central banks. The Federal Reserve is winding down its $4 trillion bond-buying program -- known as QE -- this month. And many investors expect the European Central Bank to launch its own program on a similar scale.
"We're approaching the end of QE, and I think the market is going through a period when people are asking, how important is it to lack that support?" Joy said. "The open question is how robust is the economy you're left with. Is it strong enough to sustain earnings growth?"
Rising supplies and weak global demand continued to weigh on the price of crude oil on Monday, which has tumbled from a high of $107 a barrel in June. Goldman Sachs was the latest Wall Street bank to lower its forecast for prices in a report, saying OPEC was unlikely to cut exports to try pushing prices back up. Benchmark U.S. crude fell 1 cent to close at $81 a barrel in New York after trading much lower earlier in the day.
Among other companies making big moves, Micron Technology (MU) surged 4 percent after the chipmaker announced plans to spend as much as $1 billion to buy its own shares. Micron jumped $1.24 to $32.30, extending a rally that has pushed the stock up 48 percent this year.
Merck (MRK) said its earnings and sales fell in the third quarter, and the pharmaceutical company also scaled back its most optimistic forecasts for full-year profits and revenue. The news knocked Merck's stock down $1.16, or 2 percent, to $56.45.
In other trading on Monday, prices barely budged in the market for U.S. government bonds. The yield on the 10-year Treasury note slipped to 2.26 percent from 2.27 percent late Friday.
In the commodity markets, gold fell $2.50 to settle at $1,229.30 an ounce, silver slipped 2 cents to $17.16 an ounce and copper edged up 2 cents to $3.06 a pound.
Brent crude, a benchmark for international oil used by many U.S. refineries, fell 30 cents to close at $85.13 in London.
In other trading on the New York Mercantile Exchange:
- Wholesale gasoline fell 1.2 cents to close at $2.170 a gallon.
- Heating oil fell 0.7 cents to close at $2.475 a gallon.
- Natural gas fell 6.2 cents to close at $3.561 per 1,000 cubic feet.