S&P 500 edges lower, but Dow ekes out gains

NEW YORK (MarketWatch) — The S&P 500 index ended slightly lower on Monday, while the Dow Jones Industrial Average eked out a small gain after global powers agreed a deal with Iran to curb the nation's nuclear program.

The market just showed a little fatigue on Monday afternoon after strong action in recent weeks, said Peter Cardillo, chief market economist at Rockwell Global Capital.

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"It's just normal growing pains," he told MarketWatch, adding that it's a holiday-shortened week and volume is light so the market's gyrations can be somewhat exaggerated.

The Nasdaq Composite (COMP)  briefly topped 4,000 on Monday, but the tech-heavy index couldn't finish above that milestone level that it last closed above since September 2000. It ended up 2.92 points, or about 0.1%, at 3,994.57.

The S&P 500 index (SPX)  fell 2.28 points, or about 0.1%, to end at 1,802.48, pulling back from Friday's record close but staying above its milestone level of 1,800.

The Dow Jones Industrial Average (DJIA)  rose 7.77 points, or less than 0.1%, to finish at 16,072.54, scoring another record close and pushing further above the 16,000 mark.

Click to Play Iran and global powers reach deal

Oil prices fell in Asia as traders digested the implications of the weekend deal on Iran's nuclear program. The WSJ's Markets and Energy editors, Jake Lee and Simon Hall, discuss how the deal has reduced one potential Middle East flashpoint.

Over the weekend, Iran and six global powers including the U.S. reached a six-month agreement to curb Tehran's nuclear program. Some economic sanctions on Iran will be eased as part of the deal, but core sanctions on Iran's banking and oil trade will remain in place.

The Iran deal pressured oil prices, with January crude futures (CLF4)  falling 75 cents to settle at $94.09 a barrel on the New York Mercantile Exchange. Lower oil prices are good for growth and that's good for stocks, said Henrik Drusebjerg, strategist at Nordea Bank.

"We're almost through reporting season for companies in the U.S. and Europe, and one thing that is common for everybody is earnings are falling or stable, so very few companies are able to increase earnings," Drusebjerg said. "So if we want to see increased earnings, we want to see increased growth, and lower oil prices would definitely help that."

Today's market-moving news: Traders viewed the Iran deal as Monday's main headline. Read more about the market's winners and losers from that agreement. The economic data calendar was light, with pending U.S. home sales serving as the highlight. The pace of pending home sales fell in October for the fifth straight month, a trade group said.

Today's movers & shakers: J.C. Penney Co. (JCP)  rose 3.6% despite news late Friday that the ailing retailer is leaving the S&P 500, while software maker Workday Inc. (WDAY)  fell 1% ahead of its earnings report after the close. Read more in the Movers & Shakers column.

The buzz: Fear of investing at market peaks is understandable, but for longer-term investors, market levels have no predictive power, according to an Alliance Bernstein strategist cited in the latest Need To Know column. Meanwhile, before investors get "too merry" as the holidays begin, they need to recognize "the simple truth that now good growth better come," said Deutsche Bank strategists on Monday. Factors like an accommodative Federal Reserve and not-yet expensive valuations will "assist the market in 2014, but healthy [earnings-per-share] growth is now a must," they wrote in a note.

Other markets: European stocks closed mostly higher, while Asian equities finished mixed.