Wall Street starts November on a quiet note

NEW YORK - The stock market held close to record levels on Monday as a report showed that manufacturing remains on sound footing in the U.S. even as other parts of the global economy struggle. Falling oil prices weighed on energy stocks.

The U.S. manufacturing sector rebounded last month, matching a three-year high, according to The Institute for Supply Management, a trade group of purchasing managers. The report was preceded by downbeat manufacturing readings from China and Europe, feeding concern that growth in these regions could slide.

The sluggishness overseas "put a little damper on the U.S. data," said Brad Sorensen, Director of Market and Sector Analysis at the Schwab Center for Financial Research. "Really where the concern lies, at this point, is overseas."

Stocks are trading near record levels after strong company earnings helped the stock market recover from an early October slump. The market closed at an all-time high on Friday after the Bank of Japan surprised investors by announcing it would increase its bond and asset purchases in an effort to stave off deflation.

Monday's action was far more muted. The Standard & Poor's 500 index fell just 0.24 points, or less than 0.1 percent, to close at 2,017.81. The Dow Jones industrial average dropped 24.28 points, or 0.1 percent, ending at 17,366.24. The Nasdaq composite gained 8.17 points, or 0.2 percent, to finish at 4,638.91.

Falling energy stocks also weighed on the stock market on Monday, as the price of U.S. benchmark oil slid to its lowest level in more than two years. Oil slumped following reports that Saudi Arabia is cutting the price it sells oil to the U.S. as it tries to maintain its market share, Bloomberg reported.

Benchmark U.S. oil dropped $1.76 to close at $78.78 a barrel. Brent crude, the international benchmark, slipped $1.08 to $84.78.

Oil has fallen sharply in recent weeks as global supplies rise while demand for fuel trails earlier expectations.

Energy stocks in the S&P 500 index dropped 1.8 percent Monday. The sector is now down 3.3 percent for the year. The sector is the worst performer among the 10 industry groups that make up the S&P 500 index, and the only one to be down for the year.

Deal news helped raise the stocks of some individual companies.

Sapient (SAPE) surged after French advertising group Publicis (PUBGY) said it would buy the Boston-based marketing, communications and consulting firm for $3.7 billion in cash. Sapient soared $7.28, or 42 percent, to $24.60.

Covance (CVD) jumped after LabCorp (LH) said it would pay about $6.1 billion in cash and stock to buy the company in a tie-up that aims to improve clinical trial research for pharmaceuticals. Covance shareholders will receive $75.76 in cash and a portion of LabCorp stock for each share they own. Covance's stock climbed $20.67, or 25.9 percent, to $100.57.

As more than 70 percent of companies in the S&P 500 index have now reported their third-quarter earnings, investors will start turning their attention to economic reports, said David Lebovitz, Global Market Strategist for J.P. Morgan Funds. They'll be looking to see whether the U.S. can continue to expand, while other regions in the world struggle for growth.

In the U.S., "the data continues to be pretty solid," Lebovitz said. "What we're observing is an up-shift in U.S. economic growth."

The biggest economic news this week will likely come on Friday, when the U.S. government releases its monthly jobs report. Now that the Federal Reserve has ended its bond-buying program, investors are assessing when the Fed will start to raise interest rates.

In metals trading, the price of gold slipped $1.80 to $1,169.80 an ounce, silver rose 10 cents to $16.20 an ounce and copper rose two cents to $3.07 a pound.

In currency trading, the Japanese yen continue its slide against the U.S. dollar after the Bank of Japan's announcement that it would increase its asset purchases. The dollar rose 1.3 percent to 113.77 yen. The U.S. currency also gained against the euro, rising 0.3 percent to $1.2487.

In U.S. government bond trading, the yield on the 10-year Treasury note was little changed from Friday at 2.34 percent.