U.S. stocks little changed amid bank results, retail sales data

NEW YORK (BLOOMBERG) - U.S. stocks were little changed, after the Standard & Poor's 500 Index fell on Wednesday for the first time in five days, as investors weighed results from the nation's largest banks and data showed consumers tempered purchases last month.

The S&P 500 declined less than 0.1 per cent to 2,003.11 at 9:33 a.m. in New York, after the gauge closed lowerTuesday for only the second time this month.

"This is the calm before the storm of earnings and investors are still waiting to get a clearer picture of how companies view the final quarter of the year," said Hugh Grieves, who runs the U.S. Opportunities Fund at Miton Group in London. "Hopefully, a clearer picture will emerge as more companies report."

Analysts project profits for S&P 500 members dropped 7.2 per cent in the third quarter. Netflix Inc., the best-performing stock in the S&P 500 this year, reports results after markets close today.

Asian and European shares slipped today after a report showed China's factory gate deflation extended a record stretch of declines while inflation moderated. Weak imports data out of China helped send the S&P 500 lower yesterday, while selling picked up in biotechnology stocks.

U.S. data Wednesday showed retail sales in September rose less than forecast as Americans increased their savings, while the prior month was weaker than previously reported. Sluggish sales may raise concern about whether the staying power of consumer spending, which accounts for about 70 per cent of the economy, at a time overseas demand is also cooling. A separate report showed falling energy costs damped wholesale inflation. The producer price index decreased 0.5 per cent, the most since January.

Federal Reserve officials last month left interest rates unchanged, opting to monitor the risk that China's slowdown could spill over to the U.S. After the latest data from both China and the U.S., traders are now pricing in a 30 per cent chance the central bank raises rates this year, while odds of a March increase are about 52 per cent, down from 62 per cent on Monday.

Fed Governor Daniel Tarullo told CNBC that he doesn't currently favor raising interest rates in 2015. That lines him up with fellow Governor Lael Brainard, who made the case on Monday for patience, and diverges from the majority of Federal Open Market Committee members including Yellen.

Investors will also have an opportunity this afternoon to assess the Fed's latest Beige Book survey, which provides anecdotal information about the economy based on reports from regional banks.

"The probability of a global recession is rising as news out of China gets worse," Miton Group's Grieves said. "As each data point comes out, positive or negative, sentiment lurches from one extreme to the other very quickly."