10-31-13 12:51 PM EDT | Email Article

By Victor Reklaitis, MarketWatch


NEW YORK (MarketWatch) -- U.S. stocks wobbled near the break-even mark on Thursday, digesting losses from the prior day that were sparked by a less-dovish-than-expected Federal Reserve statement.


Some market strategists see equities taking a break after a strong 2013 that's left the S&P 500 around record levels and up nearly 24%.


The S&P 500 (SPX) was last up 2 points, or 0.1%, to 1,765. Consumer discretionary and information technology fared best among S&P 500 sectors, while utilities and financials performed worst.


The Dow Jones Industrial Average(DJI) fell 1 point, or less than 0.1%, to 15,618. The blue-chip index was bolstered somewhat by a 1.6% rise by Dow component Exxon Mobil Corp.(XOM) after its earnings report early Thursday, but hurt by a post-earnings slide of 3.1% by Visa Inc.(V), one of its new components.


The Nasdaq Composite(RIXF) last traded up by 9 points, or 0.2%, at 3,939.


"We just think the market is ready for a pause," said Jim Russell, senior equity strategist for U.S. Bank Wealth Management, which has $113 billion in assets under management. He said the stock market is "a little bit tired here. It has had quite a run."


Stocks could trade sideways to down modestly for several sessions or a few weeks, Russell said. Investors may be starting to think about another round of negotiations in Washington, he said. A House-Senate budget conference committee faces a mid-December deadline, and a stopgap budget expires in mid-January.


For the month of October, the S&P 500 is on pace for a gain of 5%; the Dow, an advance of 3.3%; and the Nasdaq, a rise of 4.5%. Russell said Thursday's action was featuring the usual end-of-month window dressing, but there also was a tax component to the distortion due to funds whose fiscal year ends in October.


In economic news on Thursday, the Chicago purchasing managers index rose to 65.9% in October, easily topping forecasts for 54.5%. Meanwhile, a report on jobless claims roughly matched expectations.


On Wednesday, equities closed down from record levels after the much-anticipated Fed statement. As expected, the central bank made no changes to interest rates or its asset-purchases program, but the accompanying statement left some Fed observers worried a tapering to the stimulus measures could come sooner than expected. Consensus expectations for the taper had been March.


"The market was caught slightly off guard with that kind of read on the Fed announcement yesterday," U.S. Bank's Russell told MarketWatch on Thursday.


On the earnings front, Facebook Inc. (FB) was showing volatile action in the wake of the social-media company's quarterly report late Wednesday. It was last up 4%.


After the closing bell on Thursday, American International Group Inc. (AIG) is among the companies slated to post its quarterly results. AIG, bailed out by the government in 2008, is projected to post third-quarter earnings of 96 cents a share on $8.9 billion in revenue. AIG dipped 0.2%.


While most companies have been beating forecasts with their third-quarter earnings, Russell said firms are topping low expectations. "We would give the third-quarter release season just a C+," the U.S. Bank strategist said.


In other financial markets, Asian stocks were mostly lower, but European markets were mostly higher, while the dollar(DXY) rose. Gold and silver dropped, and oil prices also dipped.

-Victor Reklaitis; 415-439-6400; AskNewswires@dowjones.com


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10-31-13 1251ET

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Morningstar - 2013/10/31 - UPDATE: Stocks roughly flat after Fed; 'ready for a pause'
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