U.S. stocks retreat; Energy stocks sell off

NEW YORK (MarketWatch) — U.S. stocks retreated on Monday, pausing after a big rally last week, as big losses in the energy and materials sector weighed on the main benchmark.

Crude oil prices plummeted after Goldman Sachs analysts slashed their target price to $75 from $90, resulting in a sharp pullback by energy stocks.

The S&P 500

























SPX, -0.41%





















 moved slightly lower, after recording its biggest weekly gain of the year last week.

The Dow Jones Industrial Average

























DJIA, -0.23%





















 edged lower, with nearly two thirds of its components trading in negative territory.

The Nasdaq Composite

























COMP, -0.52%





















  also began the day trading lower.

Across the Atlantic relatively sanguine results of a series of tests of the health of the European banking system were overshadowed by worry over weak German data, sending European stock markets lower.

This week, markets will focus on the Federal Open Market Committee meeting, where the central bank is expected to announce the end of quantitative easing. How QE worked in the U.S. — and could work in Europe.

Traders will be looking to see if the Fed drops the"considerable period" language in referencing its plans keeping rates low, at its two-day policy meeting, which concludes Wednesday. As several Fed officials have come out with dovish comments recently, investors largely expect that guidance to be reiterated.

"There will be no press conference for this meeting therefore, the chances for a shock pause in tapering is very low," said Nour Al-Hammoury, chief market strategist at ADS Securities in Abu Dhabi, in a note. He added the market would likely not see the sort of wild swings that have characterized benchmark averages over the past few weeks until that Fed announcement.

Goldman sees another 10% gain for stocks: The S&P 500 should climb to 2,050 by year-end and rise by 10% to 2,150 in 10 months, said Goldman Sachs's chief equity strategist David Kostin in a note to clients Friday. He said that move will come as "investors recognize the durability of U.S. growth, despite faltering global activity."

The September reading on pending-home sales will be released at 10 a.m. Eastern Time. The week will also deliver data on durable goods, gross domestic product and consumer spending. Growth data will be the highlight, with the government expected to report economic expansion of 3% in the third quarter.

Stocks to watch: GoPro Inc.

























GPRO, -4.78%





















 shares retreated, extending a sharp fall from Friday, when Oppenheimer analysts initiated a sell rating on the wearable camera maker.

 

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