Wall Street ends flat on eve of US midterm votes
Investors were reluctant to make big bets ahead of two events that could dictate the stock market’s direction for the rest of the year and beyond, leaving shares little changed yesterday.
The benchmark S&P 500 index rose 12.9 per cent since the start of September on hopes for Republican gains in Tuesday’s elections and a Federal Reserve announcement of monetary easing on Wednesday. If the election ends in the Republican Party taking control of the House the Obama administration’s ability to enact its agenda would be in jeopardy. With those events imminent, trading volume was light and a one per cent early rally was erased as investors turned cautious.
The CBOE Volatility index, the market’s favourite anxiety gauge, rose for the sixth straight day, a sign investors were boosting bets on further gyrations in the near term.
Oil service stocks were among the leaders after Baker Hughes reported a third-quarter profit that beat expectations. The stock rose 5.2 per cent to $48.73 while the Oil Service sector was up 0.7 per cent.
M&T Bank Corp rose 4.5 per cent to $78.12 after news it would buy Wilmington Trust Corp in a deal worth $351m. Shares of Wilmington fell 42.5 per cent to $4.09 and weighed on regional banks.
The Dow Jones industrial average was up 6.13 points at 11,124.62. The Standard & Poor’s 500 Index was up 1.12 points at 1,184.38. The Nasdaq Composite Index was down 2.57 points at 2,504.84.
On the Dow, Caterpillar rose 0.9 per cent to $79.27 while Exxon Mobil climbed 0.7 per cent to $66.95. Weighing on the Nasdaq was Amazon.com down 1.6 per cent at $162.62. The stock fell 2.3 per cent last week but was up 32 per cent from the beginning of September through the end of October. JPMorgan Chase & Co fell 0.6 per cent to $37.42 after ProPublica, an investigative journalism website, said the Securities and Exchange Commission is investigating whether the bank adequately disclosed that a hedge fund helped select assets for a $1.1bn package of subprime mortgages while also betting against portions of the deal.