United States stocks were little changed on the last day of October, as investors weighed upbeat corporate earnings against the potential for the Federal Reserve to pare its stimulus efforts.
A quiet trading session brought close to a big month for US stocks. The S&P 500 has rallied 4.9% in October despite the 16-day government shutdown that gripped Washington and briefly cast doubt over US credit. Markets shrugged off the uncertainty in part because the shutdown pushed back expectations for when the Fed might begin to wind down, or "taper," its monthly bond-purchase program.
Both the Dow and S&P 500 sit just below all-time highs, and investors are hesitant to call a top to the market, especially with few hurdles on the horizon in the coming weeks. The S&P is up 24% this year.
"Cheap money has been fuelling this puppy, and the cheap money is going to stay around for a while," said Martin Leclerc, chief investment officer at Barrack Yard Advisors.
"It seems like the path of least resistance is still higher."
Possible changes to Fed policy remain a focus. On Wednesday, the central bank's assessment of the US economy was upbeat, leaving open the possibility that the Fed could still begin to reduce its bond-buying efforts in December. The S&P 500 slipped 0.5% on Wednesday, snapping a four-day winning streak.
Investors warn that the market could continue to treat positive economic developments as a hindrance to stocks. On Thursday, stocks briefly fell to session lows after a monthly survey of Chicago purchasing managers unexpectedly rose last month to 65.9, the best reading since March 2011, far higher than expectations for 55.7.
"The more good news on the economy, it just increases the odds that 'tapering' will begin sooner," said Hank Smith, chief investment officer at Haverford Trust. "What is more important for investors, those with a longer-term outlook, is that monetary policy will remain extraordinarily accommodative for several more years."
The yield on the 10-year Treasury note rose to 2.560% from 2.526% late Wednesday. Stocks sensitive to interest rates such as utilities were the S&P 500's worst performers.
Exxon Mobil rose after the company's third-quarter net income and revenue topped Wall Street's estimates.
Facebook was recently higher, recovering from early declines. Late Wednesday, the social-media company posted a rise in mobile advertising, but some worried that the company reported a decrease in usage among young teens.
Visa dropped after the debit- and credit-card transaction processor said that sales grew less than expected, while profits matched expectations.
Expedia soared more than 15% after reporting late Wednesday that its quarterly earnings handily topped Wall Street's forecast.
ConocoPhillips rose modestly after the exploration-and-production company posted a quarterly earnings increase of 38%, with results boosted by a gain on an asset sale. The company unveiled plans to sell its interests in other assets.
Initial claims for US unemployment insurance fell last week, though slightly less than economists expected. Initial claims for jobless benefits fell by 10,000 to a seasonally adjusted 340,000 in the most recent week. Economists had expected 335,000 new claims.
In Europe, stocks recovered from early losses, with the Stoxx Europe 600 index gaining 0.5%.
Asian markets were mostly lower Thursday. The Bank of Japan kept its benchmark interest rate steady and maintained its bond-buying program. Japan's Nikkei sank 1.2%, while the Shanghai Composite lost 0.9%.
In oil markets, front-month December crude oil futures fell 0.2% to $96.55 a barrel, while November gold futures declined 1.9% to $1,324.10 a troy ounce. The dollar rose against the euro but fell versus the yen.