NEW YORK – Stocks slipped in low volume on Monday as traders awaited Tuesday's U.S. election to place bets on sectors seen performing better under one or the other political party.
Democratic President Barack Obama and his challenger, Republican Mitt Romney, sprinted through key states on the last day of the race for the White House. Investors also eyed congressional races to gauge how the United States will deal with the $600 billion in spending cuts and tax hikes that could kick in next year and send the economy reeling.
"People are pausing ahead of the election and what that means for the fiscal cliff," said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
Leading world economies pressed the United States on Sunday to act decisively to avert the fiscal cliff, calling it the biggest short-term threat to global growth.
The market's reaction to data showing the pace of growth in the U.S. services sector slowed modestly in October was muted. Data from the Institute for Supply Management showed new orders slipped, but employment improved.
Paulsen said economic data could soon start to show the impact of superstorm Sandy on the economy after battering the U.S. northeast.
A week after Sandy wreaked havoc on New York City and the surrounding area, close to 2 million people still have no power as cold weather sets in. On Sunday 30,000 to 40,000 people in New York City were in need of shelter.
The Dow Jones industrial average fell 47 points, or 0.36 percent, to 13,046.16. The S&P 500 dropped 5.43 points, or 0.38 percent, at 1,408.77. The Nasdaq Composite was down 2.82 points, or 0.09 percent, at 2,979.31.
Transocean Ltd reported a higher-than-expected adjusted profit for the third quarter and its shares were up 5.4 percent at $48.55.
Stifel Financial Corp shares gained 1.9 percent to $32.50. KBW Inc climbed 7.3 percent to $17.49 after Stifel said it would buy the smaller rival in a cash-and-stock deal valued at about $575 million to form an investment bank focused on the financial services industry.
A private survey of China's growing services sector slipped in October, with weaker-than-expected new orders injecting a note of caution after three previous PMI surveys for October showed the world's second-largest economy regaining momentum.
Greece's government will present a new austerity package to parliament on Monday, facing a week of strikes and protests over proposals which must win deputies' approval if the country is to secure more aid and stave off bankruptcy.
(Reporting by Rodrigo Campos; Editing by Kenneth Barry)