U.S. stocks traded mixed Monday, while oil prices extended their near-term rally into a ninth consecutive week, as concerns over surging inflation pressures and the weakest China growth rate in more than a year tamed optimism linked to a strong start to the third quarter earnings season.
Stocks were also hit by a weaker-than-expected reading of September factory output, which fell 0.7% -- the most in seven months -- as supply chain disruptions stalled activity around the country.
China posted its weakest growth rate in more than a year overnight as a rolling power crisis, supply chain disruptions and a crackdown on the tech sector combined to slow third quarter GDP to just 4.9%, the weakest since the pandemic trough of 2020.
Tougher emissions standards, as well as a reported supply shortage, have lifted coal prices to an all-time high, triggering both a surge in substitute energy prices and the ongoing power crisis, which is limiting industrial output as factories are forced to close and shop floors go dark.
The weak China data, as well as concerns over faster inflation, fueled in part by surging power prices, triggered both a warning on interest rates from the Bank of England and a pullback in regional markets, with the Stoxx 600 falling 0.5% by mid-day trading in Frankfurt.
On Wall Street, earnings will take center-stage again this week with around 78 S&P 500 companies reporting September-quarter profits, including tech heavyweights Tesla (TSLA) - Get Tesla Inc Report, Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report, IBM (IBM) - Get International Business Machines (IBM) Report and Intel (INTC) - Get Intel Corporation (INTC) Report along with Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report, AT&T (T) - Get AT&T Inc. Report and Procter & Gamble (PG) - Get Procter & Gamble Company Report.
Last week's stronger-than-expected bank earnings have lifted collective profit forecasts for the S&P 500, with analysts now looking for third quarter earnings to rise 32% from last year to $421.4 billion.
The Dow Jones Industrial Average was marked a modest 20 points lower by late-morning trading Monday while the S&P 500, coming off its best week since July, gained 8 points.
The Nasdaq Composite, meanwhile, added 60 points as investors as investors added to tech holdings amid reports of a mutating Delta variant in the United Kingdom adding to a recent spike in COVID infections.
Apple (AAPL) - Get Apple Inc. (AAPL) Report shares edged 0.4% higher ahead of the tech giant's second major launch event of the autumn -- 'Unleashed" -- where it is expected to unveil the first redesign of its MacBook Pro laptop in at least five years.
Biogen (BIIB) - Get Biogen Inc. Report shares fell 3.36% after the drugmaker said late-stage tests of its experimental treatment of certain forms of Lou Gehrig's disease for failed to meet expectations, but showed enough promise for a follow-on trial.
Walt Disney Co (DIS) - Get Walt Disney Company Report shares fell 2.87% after analysts at Barclays lowered their rating and price target on the media and entertainment group, citing slower growth from its Disney+ streaming service.
U.S. Steel Corp (X) - Get United States Steel Corporation Report shares slumped 4.77% following a 'double-downgrade' from analysts at Morgan Stanley linked to lower metals prices and the group's expansion plans.
Away from equities, Bitcoin hovered near six-month highs on Monday, holding above the $60,000 mark, ahead of the listing of the first futures-based bitcoin exchange-traded fund in the United States.
Oil prices were also back on the march, and testing the highest levels in seven years, as cold weather in Europe and China compounded the rolling power crisis in both regions and added to bets on rising crude demand in the coming months.
WTI crude futures for November delivery were marked 25 cents higher on the session at $82.53 per barrel while Brent contracts for December, the global pricing benchmark, were down 7 cents at $84.79 per barrel.