U.S. stocks drifted little changed on Monday, after the market's best week of the year, as investors tracked the cost of crude as a proxy for the health of the global economy and sorted through quarterly earnings.
"We have a tug of war between strong fundamentals in the U.S. versus the global macro," said Art Hogan, chief market strategist at Wunderlich Securities.
And, Wall Street currently views $80.50 a barrel for West Texas Intermediate as a pivot point for risk on, risk off. "All of a sudden, WTI at $80.50 is a barometer for the global economy. Above it and the world is not a terrible place, and below the sky is falling," Hogan said.
The largest market driver is "some of the disappointing numbers out of Europe. There is some improvement, but not enough to move the needle," said Bruce McCain, chief investment strategist at Key Private Bank.
The European Central Bank on Sunday said about one in five of the euro-area major lenders failed stress tests at the end of 2013, but most have since fixed their finances.
"Half are in motion to fix their problems, and others are well on their way to righting their ship," said Wunderlich's Hogan.
"The counter balance was the German IPO survey," Hogan added of a report showing German business sentiment declining in October for a sixth consecutive month, increasing worries about Europe's biggest economy.
"If we have one clear economic concern, it's the deteriorating economic situation in Europe," said McCain.
Merck & Co. slipped after the pharmaceutical company posted earnings above estimates but revenue slightly short, while narrowing its 2014 earnings outlook. Apple edged lower amid reports drugstore-chains Rite Aid and CVS Heath had disabled the consumer-technology company's mobile wallet from working in their stores.
In a report late Sunday, Goldman Sachs cut its 2015 outlook for oil prices, saying it expects U.S. benchmark West Texas Intermediate crude to drop to $75 a barrel and Brent to $85 a barrel in the first quarter of 2015.
"Although energy prices in the U.S. have yet to get off the mat, the lower prices have morphed from signs of economic slowing here to a boon for consumers with added spending cash for the Christmas holiday," Paul Nolte, portfolio manager at Kingsview Asset Management, noted in emailed comments.
The CBOE Volatility Index, a measure of investor uncertainty, rose 2.2 percent to 16.47.