U.S. stocks fluctuated near eight-week highs, as semiconductors rose amid deal activity to offset disappoint with Morgan Stanley’s weaker-than-expected profit report.
Morgan Stanley fell 5.7 percent, following Goldman Sachs Group Inc. and JPMorgan Chase & Co. in reporting a drop in bond-trading revenue. PMC-Sierra Inc. jumped 14 percent as Microsemi Corp. offered to buy the company for about $ 2.4 billion. Intel Corp. added 1.6 percent. Energy and raw-material shares retreated for the first time in four days as oil and other commodities slipped after a reading showing slower growth in China.
The Standard & Poor’s 500 Index lost 0.1 percent to 2,031.87.49 at 12:12 p.m in New York, paring an earlier 0.5 percent drop, after rising for a third straight week. The Dow Jones Industrial Average declined 12.36 points, or 0.1 percent, to 17,203.61. The Nasdaq Composite Index gained 0.4 percent, boosted by gains in biotechnology shares.
A report today showed China’s economy expanded quicker than economists forecast in the third quarter as the services sector offset weaker manufacturing. While the 6.9 percent growth in gross domestic product was the slowest since 2009, the stabilization should ease fears of a deeper downturn.
The S&P 500 is rebounding from its worst quarter in four years, even as investor sentiment swings between concern over China’s slowdown and optimism that the Federal Reserve is in no hurry to raise interest rates. The probability of a U.S. rate increase this year has diminished to about 42 percent, from 64 percent before the Fed’s September meeting, with March the first month for which traders price in at least even odds of a rate boost.