San Francisco Frontiers - Stocks steady while oil prices back off three-month highs

Oil prices, meanwhile, fell after reaching three-month highs on concerns over a possible wider conflict in the Middle East after a drone attack on a base in Jordan killed three American troops.

"Strikingly, oil prices, which shot up initially on the report, have rolled over," said market analyst Patrick O'Hare at Briefing.com.

"The price action there -- and in the equity futures market in general -- suggests traders aren't convinced the drone strike, and impending response, will lead to a more involved military action and major disruption of oil supplies out of the Middle East," he added.

President Joe Biden blamed Iran-backed militants for the first US military deaths in the region since the Israel-Hamas war began.

Iran said it had nothing to do with the attack and denied US and British accusations that it supported militant groups responsible for the strike on the remote frontier base in Jordan's northeast, near the borders with Iraq and Syria.

AJ Bell investment director Russ Mould said crude prices hitting their highest level since November felt "ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut."

The week's key market event was expected to be Wednesday's interest rate policy decision by the Federal Reserve.

While the Fed meeting is expected to keep rates unchanged, traders hope to hear some guidance from officials on their plans, with a cut in March seen as a toss-up.

David Morrison, senior market analyst at Trade Nation, said there are hopes that the Fed statement and chairman Jerome Powell's subsequent press conference "may contain clues to the timing of the first rate cut for nearly four years."

The Bank of England will announce its latest interest rate call on Thursday.

Other notable events this week include earnings from tech and energy giants, including Apple and Shell, in addition to US jobs data.

With so much news on the calendar this week equity trading got off to a cautious start in Europe and the United States.

"There is a lot the market doesn't know right now about the events that will unfold in the very near-term," said O'Hare.

"Accordingly, it is keeping its eyes pinned to the sky, waiting to see if it will be rain or shine from the headlines," he added.

Elsewhere, the Shanghai stock market closed lower following news that a Hong Kong court had issued a winding-up order against Chinese developer Evergrande, stoking fresh worries about the property sector and economy.

Evergrande's Hong Kong-listed shares collapsed more than 20 percent on the news before they were suspended.

Still, Redmond Wong, chief China strategist at Saxo Markets, said "the winding-up of Evergrande's Hong Kong listing entity has been widely anticipated and should not impact the general market much".

Monday's decision came amid worries that a huge debt crisis in China's property sector could spill over into the wider economy.

The order kickstarts a long process that should see Evergrande's offshore assets liquidated and its management replaced, after the company failed to develop a working restructuring plan.

- Key figures around 1430 GMT -

Brent North Sea Crude: DOWN 0.8 percent at $82.88 per barrel

West Texas Intermediate: DOWN 0.9 percent at $77.33

New York - Dow: FLAT at 38,105.22 points

New York - S&P 500: FLAT at 4,892.36

New York - Nasdaq Composite: UP less than 0.1 percent at 15,468.66

London - FTSE 100: UP less than 0.1 percent at 7,640.99

Paris - CAC 40: FLAT at 7,634.49

Frankfurt - DAX: DOWN 0.4 percent at 16,898.33

EURO STOXX 50: DOWN less than 0.1 percent at 4,631.70

Tokyo - Nikkei 225: UP 0.8 percent at 36,026.94 (close)

Hong Kong - Hang Seng Index: UP 0.8 percent at 16,077.24 (close)

Shanghai - Composite: DOWN 0.9 percent at 2,883.36 (close)

Euro/dollar: DOWN at $1.0812 from $1.0858 on Friday

Pound/dollar: DOWN at $1.2684 from $1.2703

Dollar/yen: DOWN at 148.03 yen from 148.13 yen

Euro/pound: DOWN at 85.21 pence from 85.44 pence

burs-rl/lth

S.Jackson--SFF