Dow ends slightly higher but S&P 500 falls as investors get nervous about Europe and trade

Chinese delegation canceled visits to farms

By Anneken Tappe, CNN Business
Spencer Platt/Getty Images

(CNN) - The Dow eked out a small gain Monday, after a lackluster trading session following weaker-than-expected economic data in Europe and renewed fears about the trade war.

Investors are still coming to grips with the latest developments on the US-China trade front, after a Chinese delegation canceled visits to midwestern farms on Friday

Stocks finished mixed. The Dow closed 15 points, or 0.1% higher, snapping a modest two-day losing streak. The S&P 500 finished flat and the Nasdaq Composite closed down 0.1%.

The European purchasing managers index for September put a damper on expectations for the eurozone economy. The eurozone composite PMI came in at 50.4 — still growing, yet below expectations. The manufacturing PMI showed a worse-than-expected contraction.

In Germany, Europe's biggest economy, the manufacturing sector contracted too. While the services sector continues to expand, it is faring worse than expected.

Christine Lagarde, who is set to take over as head of the European Central Bank in November, "will need to deliver much more stimulus and help coordinate fiscal policies with governments," said Edward Moya, senior market analyst at Oanda, in a note to clients

Amid worries about global growth, trade and the geopolitical situation surrounding Iran, safe haven assets climbed higher. Bond prices rose and yields slipped, with the 10-year Treasury yield at 1.71%.

Gold prices rose, settling 1.1% higher at $1,523.70 an ounce. Silver prices were settled nearly 5% higher, according to CME.

Elsewhere in the world of metals, palladium futures climbed to their highest level ever on Monday.

US oil prices settled 0.9% higher at $58.64 a barrel, following a report from The Wall Street Journal that repairing Saudi Arabia's oil production following last week's attack could take longer after all.

Meanwhile, the New York Federal Reserve is adding liquidity for the fifth day in a row to ensure overnight lending markets continue to function smoothly. Last week, the regional central bank injected tens of billions of dollars through four overnight lending operations.

New York Fed President John Williams commented on the recent action in a speech early Monday, saying "markets were not effectively distributing liquidity across the system."

He added that the NY Fed's overnight lending operations "had the desired effect of reducing strains in the markets, narrowing the dispersion of rates, and lowering secured and unsecured rates to more normal levels relative to other benchmarks."

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