U.S. stock indexes were trading largely flat in a choppy session on Tuesday on worries over the impact of rising inflation on upcoming third-quarter earnings, while Tesla (NASDAQ:TSLA) gained after record China-made vehicles sales.
Eight of the 11 major S&P 500 sector rose, led by defensive utilities, real estate and consumer staples shares, which investors prefer during economic uncertainty.
The communication services sector dropped 1.2%, while mega-cap growth names including Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) Inc and Facebook Inc (NASDAQ:FB) weighed the most on the S&P 500 and the Nasdaq.
But Tesla added 1.8% after data showed the electric vehicle maker sold 56,006 China-made vehicles in September, the highest since it started production in Shanghai about two years ago.
Higher oil prices coupled with supply chain disruptions have set off alarm bells for businesses and consumers in the run-up to quarterly reports from companies, which will start with JPMorgan Chase & Co (NYSE:JPM) on Wednesday.
Shares of JPMorgan were down 0.4%, with the banking sub-index easing after hitting a record high recently.
"Given all of the difficulties that companies are having to deal with, there is more of a chance for more negative surprises this quarter than there were in the previous quarters," said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.
"We have had a good run here (year-to-date) so you can get continued back and forth across the markets, a lot of it is going to be this push and pull between inflation expectations, and potentially the dampening of growth."
Analysts expect a 29.6% year-over-year increase in profit for S&P 500 companies in the third quarter, according to IBES data from Refinitiv as of Friday.
At 11:44 a.m. ET, the Dow Jones Industrial Average was down 11.12 points, or 0.03%, at 34,484.94, the S&P 500 was down 3.26 points, or 0.07%, at 4,357.93 and the Nasdaq Composite was down 17.22 points, or 0.12%, at 14,468.98.
Investors also awaited the release of minutes from the Federal Reserve's meeting on Wednesday for clues on the taper timeline, while inflation and retail sales data will be scrutinized to gauge the pace of economic recovery.
Fed Vice Chair Richard Clarida said the central bank has all but met its employment goal to move ahead with reducing its bond buying program.
Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin are slated to speak at separate events later in the day.
Shares of Nike Inc (NYSE:NKE) rose 0.8% after Goldman Sachs (NYSE:GS) started coverage of the sportswear maker's stock with a "buy" rating.
MGM Resorts (NYSE:MGM) International jumped 6.9% after Credit Suisse (SIX:CSGN) upgraded the U.S. casino operator's stock to "outperform" from "neutral".
American Airlines (NASDAQ:AAL) added 0.6% after it forecast a smaller-than-expected adjusted net loss for the third quarter.
Advancing issues outnumbered decliners by a 1.72-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq. The S&P index recorded eight new 52-week highs and 10 new lows, while the Nasdaq recorded 34 new highs and 68 new lows. (Reuters)