New York: Wall Street stocks ended flat on Monday as investors clung to the sidelines on the eve of US congressional and local elections and the start of a crucial Federal Reserve meeting.
Stock indexes opened with strong gains, buoyed by the industrial data, but momentum evaporated and stocks clawed out of negative territory in late trade. Despite the choppiness lately, markets are coming off of the best October since 2006, with all 3 major indices logging big gains for the month.
“It is a wait-and-watch period,” said Mace Blicksilver, analyst at Marblehead Asset Management.
The blue-chip Dow Jones Industrial Average rose 6.13 points (0.06%) to 11,124.62, while the broader SetP 500 index advanced 1.12 points (0.09%) to 1,184.38.
The tech-rich Nasdaq composite index dropped 2.57 points (0.10%) to 2,504.84.
US manufacturing unexpectedly picked up steam in October, raising hopes for a strong final quarter that could underpin a flagging economic recovery, a key industry survey showed.
The Institute of Supply Management said its survey of purchasing managers nationwide revealed strong gains in new orders and production, pushing up its index to 56.9%, from 54.5% in September.
The surge was much stronger than a dip to 54.0% expected by most analysts.
The data came on the heels of a report that China’s manufacturing activity in China hit a six-month high in October.
Traders held back ahead of Tuesday’s mid-term elections, in which President Barack Obama’s Democrats were expected to lose seats to Republicans amid voter dismay over the weak recovery and high unemployment.
The Fed’s rate-setting open market committee begins a two-day meeting on Tuesday. The Fed is expected to announce on Wednesday that it will renew large-scale asset purchases in an effort to boost the recovery.
Financial-sector stocks were under pressure after ProPublica reported that US regulators were investigating whether JPMorgan Chase allowed a hedge fund to improperly select assests for a 1.1 billion dollar deal backed by subprime mortgages. JPMorgan shares dropped 0.56% to $37.42.
In corporate news, Anglo-Australian mining giant BHP saw its US-traded stocks rise 0.9% after a report in the British Sunday Times that it was considering to lift a 40 billion dollar bid offer to buy Canadian Potash Corp. by 10%.
AIG announced that it raised nearly $37 billion by selling off an insurance subsidiary called American Life Insurance Company, and by raising money through the IPO of AIA in Asia. AIG expects to pay off its debt to the US government with the proceeds.
McKesson shares rose nearly three% after the big drug distributor announced on Monday it will buy US Oncology in a deal valued at $2.16 billion, including debt. The bond market declined.
The yield on the 10-year US Treasury bond rose to 2.63% from 2.61% on Friday, while that on the 30-year bond climbed to 4.02% from 4.00. Bond yield and prices move in opposite directions.
Asian markets ended mixed. Chinese stocks were higher after strong manufacturing activity was reported for the country. European markets ended in positive territory.
Oil futures for December delivery gained $1.52, or nearly 2%, to $82.95 a barrel.