NEW YORK — Energy companies led U.S. stocks lower Monday as the price of oil languished around $80 a barrel and more disappointing economic news came out of Europe.
Goldman Sachs lowered its outlook for crude prices and a report on business confidence in Germany, Europe's largest economy, showed a sixth straight month of declines.
KEEPING SCORE: The Standard & Poor's 500 index slipped one point, a fraction of a percent, to 1,964, as of 11:20 a.m. on Monday. The Nasdaq composite declined one point to 4,484, while the Dow Jones industrial average rose nine points, or 0.1 percent, to 16,815.
FALLING CRUDE: Mounting evidence of rising supplies and weak demand continued to weigh on oil prices, which are down sharply from a June high of nearly $107 a barrel. Goldman Sachs was the latest Wall Street bank to lower its forecast for prices in a report out Sunday, saying OPEC was unlikely to cut exports to try and push prices back up. Benchmark U.S. crude was down $1.09 to $79.92 in New York. Brent crude, used by many U.S. refineries to set prices, was down $1.20 to $84.93 in London.
OIL STOCKS: The slide in oil tugged down shares in oil and gas producers and the companies that provide services to the industry. Exxon Mobil and Chevron fell 1 percent, and Newfield Exploration's 7 percent drop was the worst in the S&P 500.
NOT SO BAD: Last week, the stock market turned in its best performance in nearly two years, helping the S&P 500 recover from steep losses in previous weeks. The benchmark index had lost almost 6 percent by mid-October, but is now down 0.5 percent for the month.
CHOPPY TRADING: What's behind the recent turbulence? David Joy, chief market strategist at Ameriprise Financial, thinks it's 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," he said. "The open question is how robust is the economy you're left with. Is it strong enough to sustain earnings growth?"
EUROPEAN TESTS: The European Central Bank said that 13 of Europe's 130 biggest banks failed a review of their finances and need an extra 10 billion euros ($12.5 billion) to strengthen themselves. The review is meant to purge banks of bad investments to enable them to lend more. The results were initially welcomed in markets. Stocks fell only in the banks that failed as investors expected them to raise money, a process that dilutes bank share prices. 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.
QUOTE: "The stress tests showed healthy balance sheets in most major institutions while those found with capital gaps are mostly contained in periphery nations," Desmond Chua, of CMC Markets, said in a commentary.
GERMAN DATA: European stock markets swung lower later in the day when Germany's Ifo index of business confidence showed a fall for the sixth consecutive month in October, the lastest in a string of disappointing data. Some analysts suggested lower oil prices and a weaker euro should help industry and exporters, keeping the country from falling into a recession.
EUROPE'S MARKETS: Germany's DAX and France's CAC 40 index both slipped 0.4 percent. Britain's FTSE 100 dipped 0.3 percent.
CURRENCIES: The euro rose to $1.2677 from $1.2670 late Friday. The dollar fell to 107.86 yen from 108.16 yen.
ASIA'S DAY: Shares were mixed in Asia. Japan's Nikkei 225 stock index climbed 0.6 percent, and South Korea's Kospi rose 0.3 percent. Hong Kong's Hang Seng fell 0.7 percent.
FED MEETING: Investors are focusing on this week's Federal Reserve policy meeting for confirmation the U.S. central bank is ending its bond-buying program. That policy has kept long-term interest rates low to encourage borrowing and spending but also boosted stocks as investors sought higher returns. Recent mixed signals about the strength of the U.S. recovery prompted speculation that the Fed might let the program continue for longer, but many analysts consider that outcome unlikely.
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