US stocks dropped on Monday after gains of four consecutive weeks as Japan slid into recession and energy shares fell alongside crude futures.
Japan’s economy slipped into recession in Q3, setting stage for Prime Minister Shinzo Abe to delay unpopular sales tax hikes and call for snap elections two years before going to polls.
Japanese data took the prices for crude futures lower and Brent was off 0.8% at $78.74 per barrel as reported by Fox Business.
Rockwell Global Capital chief market economist, Peter Cardillo said, “Japan took the markets by surprise and it is weighing, but I don’t see a major reversal, just a market consolidating.”
The Dow Jones Industrial Average dropped 0.01% or 2.02 points to 17,632.72 and the S&P 500 Index dropped 0.05% or 0.92 points to 2,038.9. The Nasdaq Composite Index dropped 0.09% or 4.34 points to 4,684.20.
New York Times quoted Chris Gaffney, EverBank Wealth Management senior market strategist as having said, ‘Japan definitely started us on a bit of a negative tone with the economy back into recession.”
The largest gainer on percentage on the S&P 500 was Baker Hughes by 10.8% on news that Halliburton would take over it in stock and cash transaction of around $34.6 billion. Halliburton dropped 6.4%.
Denbury Resources dropped 10.1% as the largest decliner on the S&P 500 after announcing cuts to its capital spending by half for next year.
Mylan was the largest gainer on the Nasdaq 100, climbing 2.0% and VimpelCom was the largest decliner, dropping 2.4%.
Allergen gained 7.1% to $212.82 as the buyout of Actavis values the company at around $66 billion. Shares for Actavis gained 3.7% to $252.73.
The Nikkei 225 of Japan ended lower by 3%. The Hang Seng of Hong Kong lost 1.2% and the Shanghai Composite Index of China lost 0.2%. The DAX of Germany climbed 0.6% and the CAC 40 of France climbed 0.6% while the FTSE 100 of Britain gained 0.3%.
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