U.S. stocks were little changed on Monday, following the biggest weekly rally since January 2013, as energy producers declined after oil dipped below $80 a barrel while telephone and consumer shares rose.
Halliburton Co. and Nabors Industries Ltd. fell more than 6 percent to lead losses in energy companies. Merck & Co. slid 2 percent after cutting the top end of its sales forecast. Sarepta Therapeutics plunged 32 percent after saying regulators require more data on a new drug proposal. Micron Technology rallied 4 percent after announcing a share buyback program.
The Standard & Poor’s 500 Index slipped less than 0.2 percent to 1,961.63. Equities pared losses earlier as the European Central Bank said it settled 1.704 billion euros ($2.2 billion) of covered-bond purchases last week as it started its latest effort to revive the region’s economy. The Dow Jones industrial average rose 12.53 points at 16,817.94. The Russell 2000 Index fell 0.1 percent.
“Oil is the major thing on people’s minds right now,” said Skip Aylesworth, a portfolio manager at Hennessy Funds in Boston, where he helps oversee about $5 billion. “What we’re seeing is a major shift in oil pricing where prices have dropped and you have producers being impacted the most. Europe’s in trouble and Asia’s slowing down, there’s less demand and the question is will lower prices all of a sudden make oil not profitable to drill for and will this new kind of drilling for new sources slow down.”
The S&P 500 surged 4.1 percent last week for its best performance since January 2013, halting a four-week slide.
Fed policy makers are meeting today and Wednesday, when they are expected to end monthly asset purchases as the U.S. economy shows further signs of recovery. Minutes from the last meeting, when policy makers pledged to keep U.S. borrowing costs low for a considerable time, showed officials expressed concern that the economy may be at risk from a global slowdown.
Energy producers in the S&P 500 sank 2 percent as a group and were the biggest drag on the index among the 10 main industries. Accelerating output from producers outside North America including Brazil and Azerbaijan will result in an oversupply in 2015, Goldman Sachs Group Inc. said.
West Texas Intermediate oil for December delivery was down 0.4 percent at $80.67 a barrel in electronic trading at 4:37 p.m. in New York, after earlier dropping as much as 1.9 percent to $79.44.
“The single largest driver of lower earnings is the collapse in oil prices,” Goldman Sachs said in a report led by chief equity strategist David Kostin and dated Oct. 24. “Analysts and investors seem to be focusing exclusively on the negative effects of lower oil prices while neglecting the beneficiaries.”
Halliburton lost 6.1 percent as 40 of 43 energy companies in the S&P 500 retreated. Newfield Exploration, which explores for oil in the Rocky Mountains, fell 4.6 percent. Nabors, a drilling contractor, slid 6.7 percent.
Of the S&P 500 companies that have reported earnings so far, 80 percent have beaten earnings estimates and 60 percent surpassed revenue projections, according to data compiled by Bloomberg. Profit for the index’s members rose 6.3 percent in the third quarter and sales increased 4.1 percent, analysts predicted.
Merck slid 2 percent to $56.45. The second-biggest U.S. drugmaker said net income in the third quarter fell to $895 million, or 31 cents a share, from $1.12 billion, or 38 cents, a year earlier. The company’s drug sales fell 4 percent to $9.13 billion.
Sarepta Therapeutics declined 32 percent to $15.91. Food and Drug Administration officials requested additional data for the company’s proposal of Duchenne muscular dystrophy drug Eteplirsen.