Wall St. treads water amid election doubts, M&A flurry

By Lewis Krauskopf

(Reuters) - Wall Street was little changed on Monday as investors digested the latest in a spate of large-scale corporate mergers as well as revelations ahead of the impending U.S. presidential election.

Stocks were jolted on Friday by disclosure that the FBI was investigating more emails as part of a probe into Hillary Clinton's use of a private email system, causing fresh uncertainty over the Democratic candidate's presumed lead in the presidential election over Republican rival Donald Trump.

"I don't think the market had come anywhere close to discounting or even predicting a Donald Trump victory," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "So Friday's email-gate occurrence has thrown a dark cloud of uncertainty over this election."

 

The Dow Jones industrial average <.DJI> fell 19.22 points, or 0.11 percent, to 18,141.97, the S&P 500 <.SPX> gained 0.28 points, or 0.01 percent, to 2,126.69 and the Nasdaq Composite <.IXIC> added 1.31 points, or 0.03 percent, to 5,191.42.

Closing out a big month for mergers, Dow component General Electric edged down 0.1 percent after the industrial conglomerate said it would merge its oil and gas business with oilfield services provider Baker Hughes . Baker Hughes was down 7.2 percent.

Level 3 Communications rose 4.5 percent after CenturyLink said it would buy the company in a deal valued at about $24 billion. CenturyLink fell 12.5 percent.

The S&P 500 was set to end the month down about 2 percent, the third straight negative month for the benchmark index and its worst monthly performance since January.

Still, the S&P 500 is up about 4 percent for the year. Investors have been heartened as S&P 500 companies look set in the third quarter to end a streak of earnings declines. With most S&P 500 companies reported, profits are expected to have risen 3.1 percent, according to Thomson Reuters I/B/E/S.

In earnings news on Monday, Zimmer Biomet Holdings shares plunged 13.4 percent after the medical devices company's quarterly report. The stock was the biggest percentage decliner in the S&P 500.

Lumber Liquidators shares fell 17.4 percent after the company said it could not provide a timeline for potential settlements with regulators, or an outlook for its business.

Nike shares dropped 3.8 percent following a BofA Merrill Lynch downgrade on the stock, weighing on the Dow.

The market is also watching the outcome of the U.S. Federal Reserve meeting, which begins on Tuesday. While traders doubt the Fed will raise interest rates this week, they will be looking for signs to firm up their convictions for a hike at the central bank's December meeting.

Advancing issues outnumbered declining ones on the NYSE by a 1.08-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favoured decliners.

The S&P 500 posted 7 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 37 new highs and 101 new lows.