Disappointing economic data from China and Europe trigger a bout of selling in global equity markets
U.S. stocks fell on Monday, 1 December 2014 as disappointing economic data from China and Europe triggered a bout of selling in global equity markets. The downdraft was fueled in part by reports indicating weaker-than-hoped-for Black Friday sales, which weighed heavily on shares of retailers.
The Dow industrials lost 51.44 points, or 0.3%, to 17.776.80. The Nasdaq Composite's decline was the biggest in seven weeks, after shedding 64.28 points, or 1.3%, to 4,727.35. The S&P 500 SPX,fell 14.12 points, or 0.7%, to 2,053.44.
Equities faced selling pressure from the opening bell after the overnight session reminded investors about persistent growth concerns around the globe. In Asia, China's HSBC Manufacturing PMI fell to an eight-month low (50.3; expected 50.5) while Japan's debt rating was lowered to A1 from Aa3 at Moody's. Making matters worse, Germany's Manufacturing PMI slid into contraction (49.5; expected 50.0) while the eurozone Manufacturing PMI narrowly avoided the same fate (50.1; expected 50.4).
Investors' dour mood also swept over into the tech-heavy Nasdaq Composite, which saw its steepest drop in seven weeks, dragged down by big declines in tech giants such as Apple, Google, Facebook, and Alibaba.
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The heaviest-weighted stock on the S&P 500 and Nasdaq Composite, Apple fell 3.3%. Alibaba Group Holding, Yahoo! Inc, Facebook and Google were also hit hard.
Retailers such as Wal-Mart, Target and Amazon.com sold off, after retail spending over the Thanksgiving weekend fell 11%, the second straight annual decline, according to an estimate by the National Retail Federation.
World stock and commodity markets were under pressure early Monday following Friday's major collapse in crude oil pricesthe day after an OPEC meeting that failed to produce production cuts by member nations. January Nymex crude oil prices dropped to a five-year low of $63.72 a barrel in overnight trading. However, as the U.S. day session began many markets recovered from their lowest price levels seen in overnight trading. The recovery in crude oil prices spilled over into buying in many other commodity markets.
News that Moody's cut the Japanese government's credit rating was credited with prompting some safe-haven demand for gold, especially from Asian investors.
Economic data was limited to the ISM Index, which fell to 58.7 from 59.0 while the Briefing.com consensus expected a decline to 58.0. The Production Index fell to 64.4 from 64.8, which resulted from manufacturers delaying production until a later time. New orders improved as the related index increased to 66.0 from 65.8. Meanwhile, order backlogs increased to 55.0 from 53.0 in October.
Bullion prices ended higher on Monday, 01 December 2014 at Comex. Gold prices saw a massive rebound on Monday and hit a five-week high, after prices overnight scored a three-week low. The huge daily trading range in gold prices was the largest in years. The increase in the yellow, precious metal, viewed as a haven asset, was spurred, in part, by a downgrade of Japan's sovereign debt rating and a retreat in the dollar.
Gold for February delivery jumped $42.60, or 3.6%, to settle at $1,218.10 an ounce. March silver surged $1.14, or 7.3%, to $16.69 an ounce.
U.S. crude-oil futures gained more than 4% on Monday, 01 December 2014 at Nymex recovering from five-year lows hit last week after OPEC decided to maintain production levels. Crude futures plunged 10% on Friday, settling at their lowest level since September 2009 on the first opportunity for U.S. markets to react to the OPEC decision.
Light, sweet crude for January delivery rose $2.85, or 4.3%, to settle at $69 a barrel on the New York Mercantile Exchange. That was oil's largest percentage gain since August 2012, snapping a four-session losing streak.
Treasuries notched their highs shortly after the opening bell and spent the remainder of the day in a steady retreat. The 10-yr yield climbed five basis points to 2.22%.
Today's participation was ahead of average with more than 850 million shares changing hands at the NYSE floor.
Tomorrow, the Construction Spending report for October will be released at 10:00 ET.
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