US stocks retreated on Monday with manufacturing data overseas raising fresh fears of slowing economic growth and the disappointing Black Friday weekend pressured US retailers.
Shares of most oil-related stocks continued to drop despite a rebound in prices of crude.
According to The Wall Street Journal, the Dow Jones Industrial Average dropped 0.1% or 22 points to 17,807 in early afternoon. The S&P 500 index dropped 0.5% or 10 points to 2,057 while the Nasdaq Composite Index dropped 1% or 49 points to 4,742.
The worst performing sector in the S&P was the industrials with US manufacturing’s rate of growth slowing for the third straight month in November to the lowest rate since January.
Manufacturing growth also eased across Europe and Asia last month with a fail in heavy price cutting failing to revive demand.
Stifel, Nicolaus & Co market strategist Kevin Caron was quoted by Reuters as having said, ‘The places where we are seeing strength are in the more defensive areas of the market. That’s tied to the perceived weakness in global growth.”
Rising online shopping and early holiday promotions weighed on in-store US sales during the Thanksgiving weekend with shoppers having spent 6.4% less than what they had last year.
The weekend turnout was a surprise to many investors that had been betting that the improving economy and the declining prices of gasoline would help pad retailer profits in the holiday shopping season.
Wells Capital Management chief investment strategist said, “It just doesn’t add up. I look at the conditions surrounding the consumer and I would argue it’s the best I’ve seen it in this recovery.”
Wal-Mart Stores Inc dropped 0.6% and Target Corp shares dropped 1.5%.
Apple Inc. dropped 2.3% in volatile trading. The shares of the company, the largest in the stock market by market capitalization, dropped as much as 6.4% shortly after opening.
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