* Merck drops after results; Biogen climbs
* Apple shares volatile after the bell following results
* Dow down 0.01 pct, S&P 500 up 0.1 pct, Nasdaq down 0.1 pct
By Caroline Valetkevitch
NEW YORK, Oct 28 The S&P 500 closed at another
record high on Monday as expectations were high that the Federal
Reserve will keep its stimulus in place when it meets this week.
But the overall market was little changed, with the Dow and
Nasdaq ending down slightly, after the recent sharp run-up in
the stock market lost some momentum.
The S&P 500 has risen 6.4 percent since Oct. 8, when it hit
its lowest point during the U.S. government's partial shutdown
and the debate over raising the debt ceiling. The benchmark
index is up 23.6 percent for the year so far.
Relief over the end of the political impasse and investor
expectations that the Fed will keep stimulus measures in place
for at least several months because of the 16-day shutdown have
propped up prices. Fed policymakers will meet on Tuesday and
"I would like to say it's all about people waiting for the
Fed, but I don't know what they're waiting for because I don't
expect any change in Fed policy this week, given the fact they
pointed out repeatedly the fiscal issues they're cognizant of,"
said Mark Luschini, chief investment strategist at Janney
Montgomery Scott in Philadelphia.
"My concern with the market at this level is that without
signs eliciting some evidence the economy is actually
strengthening from the pace we've had, the multiple expansion
doesn't seem rational."
Shares of Apple Inc rose 0.7 percent to $529.88
ahead of the release of its earnings, expected after the bell.
While Apple's advance helped the S&P 500, the consumer staples
sector index, up 1.2 percent, gave the S&P its biggest
A number of traders appeared to be picking up call options
on the Consumer Staples Select Sector SPDR fund, which
rose 1.3 percent, on hopes that the sector will continue to
perform well through the end of the year.
The Dow Jones industrial average dipped 1.35 points,
or 0.01 percent, to end at 15,568.93. The Standard & Poor's 500
Index gained 2.34 points, or 0.13 percent, to finish at a
record 1,762.11. The S&P 500 also posted another lifetime
intraday high at 1,764.99.
The Nasdaq Composite Index slipped 3.23 points, or
0.08 percent, to close at 3,940.13.
In extended-hours trading, Apple's shares were flat after
recovering from a 5 percent drop following the tech bellwether's
results. Wall Street had hoped for a stronger beat on quarterly
sales after the iPhone maker predicted in September that its
revenue and margins would come in at the high end of its own
Apple's stock price has climbed 8.8 percent since the end of
Among the latest signs that the economy's momentum may be
easing, U.S. manufacturing output barely rose in September and
contracts to buy previously owned homes recorded their largest
drop in nearly 3-1/2 years, according to economic data released
On the down side, Dow component Merck & Co fell 2.6
percent to $45.35 and was one of the biggest drags on the Dow
after the company reported a decline in sales of its Januvia
diabetes treatment, raising concerns about growth prospects for
its biggest product.
Biogen Idec posted a rise in its third-quarter
profit and boosted its full-year earnings and revenue outlook,
sending the U.S. biotech company's stock up 0.9 percent to
Based on Thomson Reuters data through Monday morning, S&P
500 earnings are expected to have risen just 3.4 percent in the
third quarter over the year-ago period.
Of the 249 companies in the S&P 500 that have reported
earnings so far, 69.1 percent beat analysts' expectations, above
both the 63 percent beat rate since 1994 and the 66 percent rate
for the past four quarters.
Revenue has been lackluster, however, with growth seen at
2.2 percent for the quarter. Just 53.9 percent have beaten sales
estimates, below the 61 percent rate since 2002, but above the
49 percent rate for the past four quarters.
On the acquisition front, Mosaic Co agreed to buy CF
Industries Holdings Inc's phosphate mining and
manufacturing business for $1.2 billion in cash. Shares of CF
climbed 4.2 percent to $218.36 while Mosaic gained 1.6 percent