US stocks mixed as market mulls 'soft landing', dollar drops

NEW YORK, United States — Wall Street stocks were mixed at the end of Monday's session while the dollar retreated against major currencies, as markets weighed the odds that the US economy will achieve a desired "soft landing."

Major indices had jumped more than two percent on Friday following mixed economic figures that included still-solid job growth but a moderation in wage inflation, fueling hopes of a policy reprieve from the Federal Reserve.

Equities in New York appeared headed for another winning session through midday Monday, on the back of gains in Europe and Asia. 

But US indices lost their momentum in the early afternoon, leaving two of the three major indices in the red.

"Don't look into today's essentially flat close for the S&P 500 as a sign that things are getting a lot worse," said Andy Kapyrin of RegentAtlantic.

"I think the market and the economy is really complicated today. And we simply don't know how things will shape up between now and the next few months," he added.

This week's calendar includes the December consumer price index report that will be scrutinized for its implications on US monetary policy, as well as results from JPMorgan Chase and other banks.

The bank results kick off the fourth-quarter earnings season for which markets have modest expectations.

Analysts expect companies in the S&P 500 to see a drop of 4.1 percent in profits for the quarter, reflecting the hit to profit margins from elevated costs, according to financial information service FactSet.

Asian stocks finished higher as traders took heart from Friday's jobs report in the United States and the bullish session in New York. 

Markets are also weighing the prospects for growth in a reopening Chinese economy.

"Increasing evidence that the US may be able to achieve a soft landing coupled with the already billowing tailwinds of China's long-awaited reopening are fueling an insatiable appetite for risk-taking," said Stephen Innes, managing partner at SPI Asset Management.

The eurozone will meanwhile experience "very strong" growth in wages in the coming months as salaries catch up with galloping inflation, the European Central Bank predicted Monday.

The prospects of more petroleum consumption boosted oil prices, while the dollar faltered against other major currencies, falling to its lowest level in seven months against the euro.

Analysts have cited the mild winter in Europe as a positive development for the area, with the drop in natural gas prices providing a surprise boost to the region.