- Pending home sales weaker than expected
- Sentiment cautious ahead of FOMC
- Weak results at Treasury auction for 2-year notes
Dow Jones Industrials: 0.19%
Nasdaq Composite: 0.05%
S&P 500: 0.12%
US stocks erased early declines triggered by a report showing home sales dropped unexpectedly in June and despite reports the US could soon announce new sanctions against Russia.
Pending home sales fell 1.1% from a month earlier after rising 6% in May, according to the National Association of Realtors. Analysts had forecast a rise of 0.5%.
On a brighter note for the market, Markit's purchasing managers' index for services in the US remained at 61 in July, beating analysts' estimates for a drop to 59.8. A reading above 50 indicates expansion in the industry.
Separately, the Dallas Fed's Manufacturing Activity gauge rose to 12.7 in July from 11.4 in June, falling short of expectations for an increase to 12.8.
Later on in the week will be the Federal Reserve's latest policy announcement and the US monthly jobs report. Significantly, some market commentary was referencing a bearish note from Goldman Sachs on the outlook for fixed income markets.
Some traders turn cautious ahead of Fed
"Quite often, the week of the jobs report can see traders sitting on the fence a little, unsure over what the events will mean for the US recovery and how it will be received by the markets," said Alpari UK analyst Craig Erlam.
"We are fast approaching the point when I expect strong data to be greeted negatively on fears of an earlier rate hike from the Fed."
The Fed is weighing up how long to keep its interest rates near zero as the jobs market improves and inflation edges closer to its 2% target.
The central bank is expected to scale back its monthly asset purchases to $25bn from $35bn on July 30th, according to forecasts.
Corporate earnings on tap
In company news, Reynolds American, Pfizer and American Express Co. are among the S&P 500
components with results due out this week.
Pharmaceuticals Inc. declined after saying it failed to win approval for its pain treatment Zalviso from the Food and Drug Administration.
Trulia advanced as Zillow agreed to buy the company for $3.5bn.
Family Dollar Stores rallied after Dollar Tree Inc. agreed to buy the discount store chain.
From a sector standpoint the best performance was to be seen in the following industry groups: Aluminum (2.19%), Gambling (1.51%) and Mobile Telecommunications (1.41%).
US Treasuries lower after 2-year auction results
The US 10-year yield rose three basis points to 2.49%. A sale of $29bn in 2-year US Treasury notes attracted lower demand than average. The bid-to-cover ratio at Monday's auction came in at 3.22 in comparison to the 3.39 seen over the last ten auctions.
Front month West Texas intermediate crude futures fell 0.19% to $101.90 per barrel, according to the ICE.