U.S. stocks finish narrowly mixed after Japan's recession

U.S. stocks closed marginally mixed Monday to begin the week, as investors calmly embraced an unexpected contraction in the Japanese economy.

The Dow Jones Industrial Average rose 13.01 points, or 0.07 percent, to 17,647.75. The S&P 500 set a fresh record closing high at 2,041.32 points, rising 1.50 points, or 0.07 percent. The Nasdaq Composite Index dropped 17.54 points, or 0.37 percent, to 4, 671.00.

Japan's Cabinet Office announced on Monday that the nation's gross domestic product (GDP) shrank an annualized 1.6 percent in the three months through September, in stark contrast to median economists' expectations for the economy to grow 2.2 percent.

The latest GDP data for the third quarter followed a revised 7. 3 percent contraction in the previous quarter, meaning that Japan has now officially entered a technical recession. Japan's benchmark Nikkei index tumbled 2.96 percent on Monday following the downbeat data.

Responding to the news mutely, however, the U.S. stock market opened slight lower and then moving up and down in a narrow range, with the Dow and the S&P 500 flirting with record highs, as global central banks are increasingly expected to act to cope with downside risk to the global economy.

European Central Bank (ECB) President Mario Draghi said Monday that the central bank is open to use government-bond-buying program to boost the economy in the single-currency bloc, comforting investors to some extent.

On the economic front, manufacturing activity in the New York region rose in November, said the Federal Reserve Bank of New York in a survey, which showed that the Empire State general business conditions index climbed to 10.2 points in November from 6.2 points in the prior month. But the latest number was a little shy of market estimates. Any reading above zero indicates expansion in the manufacturing sector.

Meanwhile, U.S. industrial production edged down 0.1 percent in October after jumping 0.8 percent in September, said the Federal Reserve, trailing analysts' forecast of a 0.2-percent gain.

In corporate news, U.S. oil field services company Halliburton Company and its rival Baker Hughes Incorporated Monday announced a definitive agreement under which Halliburton will acquire all the outstanding shares of Baker Hughes in a stock and cash transaction valued at 34.6 billion U.S. dollars.

In response, the former's shares slumped 10.62 percent to 49.23 dollars apiece, while the latter's shares surged 8.92 percent to 65.23 dollars per share.

Last week, the three major indices posted their fourth straight weekly gains on generally upbeat data and retailers' quarterly earnings.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose 5.11 percent to end at 13.99 on Monday.

In other markets, the dollar rose against other major currencies. In late New York trading, the euro decreased to 1.2453 dollars from 1.2525 dollars in the previous session. The greenback bought 116.48 Japanese yen, higher than 116.25 yen of the previous session.

Crude prices decreased as the recession of Japan, the world's third-largest oil consuming country, dragged crude prices down. Light, sweet crude for December delivery moved down 18 cents to settle at 75.64 dollars a barrel on the New York Mercantile Exchange, while Brent crude for January delivery lost 10 cents to close at 79.31 dollars a barrel.

Gold futures on the COMEX division of the New York Mercantile Exchange fell slightly amid a stronger dollar and weak oil prices. The most active gold contract for December delivery fell 2.1 dollars, or 0.18 percent, to settle at 1,183.5 dollars per ounce.