Who knew all it would take to settle down the market was to flip the calendar to November?
After all the turbulence and violent swings of October, this first day of November was like a nice fall breeze blowing in.
Stocks barely fluttered as investors held off on any fast moves until we see what happens on Tuesday, whether John McCain or Barack Obama will be the next U.S. president.
"Right now that money is sitting on the sidelines waiting to see what happens tomorrow," Jack Bouroudjian, a principal at Brewer Investment Group, told CNBC.
The Dow Jones Industrial Average shed 5.18 to close at 9319.83 and the S&P 500 lost 2.45 to end at 966.30, while the Nasdaq gained 5.38 to close at 1726.33.
About 1.02 billion shares changed hands on the New York Stock Exchange, the lightest volume since Aug. 29, the Friday before Labor Day.
The morning's economic data were mixed.
U.S. business conditions took a sharp downturn in the third quarter and the near-term outlook is even more gloomy, according to a quarterly survey conducted by the National Association for Business Economics.
The Institute for Supply Management reported its gauge of manufacturing activity dropped to 38.9in October, its lowest level in 26 years. Economists had expected a more modest drop to 42.
"The PMI indicates a significantly faster rate of decline in manufacturing when comparing October to September," said Norbert J. Ore, chairman of the ISM survey committee.
Meanwhile, construction spending fell 0.3 percent in September, better than the 0.7-percent drop expected, and August spending was revised upward to a 0.3-percent increase.
The market has begun to show signs of stability, with major indexes trading in a narrower range (good riddance to 700-point swings!), the CBOE volatility index falling back to a level at least visible from Earth and the Libor rate falling for a 15th straight day.
Still, stability doesn't mean a rallyand we've got two major items this week: the U.S. presidential election on Tuesday and the October jobs report on Friday that could shake up the market.
The Nasdaq was the best performer of the three indexes, boosted by Biogen, which is expected to fare better than most in a slumping economy and some big-name techs.
Research In Motion , Microsoft and Dell all advanced.
Apple shares slipped after Craig Berger of FBR Capital Markets said the company may cut iPhone productionby more than 40 percent in the fourth quarter to keep pace with slowing demand.
Biogen shares jumped nearly 9 percent after Deutsche Bank gave the stock a "buy" rating and Robert W. Baird raised its rating to "outperform" from "neutral."
Nvidia ended lower after an earlier bump when Citigroup raised its rating to "buy" from "hold" on the graphics-chip maker, as well as STMicroelectronics and Integrated Device , saying it expects the sector to outperform in the next 12 months.
Verizon and AT&T each gained more than 3 percent after Wachovia said the telecom stocks were a good safe haven during an economic slowdown.
Shares of General Motors skidded 2.4 percent after the auto maker reported its sales were nearly cut in halfin October, though the auto giant managed to fend off Toyota for the No. 1 spot for at least another month. Ford's sales fell 30 percent while Toyota's dropped 26 percent.
Goodyear Tire & Rubber rose 5.4 percent as the tire maker reported a smaller-than-expected drop in its profit and announced plans to cut costs to keep pace with the the dropoff in auto demand.
There was some relief on the homefront as JPMorgan Chase, the nation's largest bank and one of its biggest mortgage lenders, temporarily halted foreclosures Friday and offered to renegotiate a swathe of mortgages.
Oil drifted lower, settling down $3.90 at $63.91 a barrel as leaders of the Organization of Petroleum Exporting Countries have declared their intentions to cut production to defend prices.
Most energy stocks finished lower but Dow component ExxonMobil ticked higher. Chevron, also a member of the Dow, fell 1.2 percent.
Another Dow component, Boeing , rose after the aerospace giant reached a four-year contract with its 27,000-member assembly workers union over the weekend.
Wal-Mart climbed 0.3 percent after JPMorgan raised its rating on the stock to "overweight."
Asian stocks closed higher as Seoul announced $11 billion in new spending and tax cuts and dismal Australian economic data cemented expectations that its central bank will slash rates again on Tuesday.
European markets extended their winning streak for a fifth straight day, led by defensive stocks, as investors anticipate rate cuts on Thursday from both the Bank of England and European Central Bank.
MONDAY: Earnings after the bell from ADP, MasterCard and Viacom
TUESDAY: Election Day; factory orders; Dallas Fed president speaks
WEDNESDAY: Weekly mortgage applications; ADP employment report; ISM services report; weekly crude inventories; Earnings from Time Warner, Cisco and News Corp
THURSDAY: Monthly chain-store sales; weekly jobless claims; BOE, ECB announcements; Earnings from Anheuser-Busch
FRIDAY: Jobs report; pending-home sales; wholesale trade; consumer credit; Earnings from Ford, Sprint Nextel and Berkshire Hathaway
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