By Anora Mahmudova and Barbara Kollmeyer, MarketWatch Weak Black
Friday sales hit retailers
NEW YORK (MarketWatch) -- U.S. stocks fell on Monday 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.
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.
Small stocks, considered riskier than their larger counterparts,
fared the worst in the down day, with the Russell 2000 falling
1.6%.
Meanwhile. commodity prices swung from trading sharply lower
during Asian and European sessions to trade sharply higher during
the regular market hours in the U.S. Energy and utility stocks rose
in tandem with a spike in oil prices.
The S&P 500 (SPX) and the Dow (DJI) saw their biggest
one-day loss since Oct 22. The benchmark index fell 14.12 points,
or 0.7%, to 2,053.44, while the Dow industrials lost 51.44 points,
or 0.3%, to 17.776.80. The Nasdaq Composite's (RIXF) decline was
the biggest in seven weeks, after shedding 64.28 points, or 1.3%,
to 4,727.35.
Volatility on the S&P 500 as measured by the CBOE VIX index
(VIX) jumped 6.5% to above 14.
Colin Cieszynski, chief market strategist at CMC markets, said
U.S. stocks are due for a small pullback after the impressive
six-week run.
"The fact that the technology stocks are selling off hard today
is indicative of just how extended markets became," Cieszynski
added.
The heaviest-weighted stock on the S&P 500 and Nasdaq
Composite, Apple Inc. (AAPL), fell 3.3%. Alibaba Group Holding Ltd.
(BABA), First Solar Inc. (FSLR), Yahoo! Inc. (YHOO), Facebook Inc.
(FB) and Google Inc. (GOOGL) were also hit hard.
Energy stocks rallied as WTI Intermediate(CLF5) and Brent crude
oil prices spiked. The S&P 500 Energy sector rose 0.7%.
Oil prices swung wildly as last week's decision by the
Organization of the Petroleum Exporting Countries to maintain
production levels continued to rattle markets. WTI slid 14% last
week and 18% for November, the biggest one-month fall since
December 2008.
Murray Edwards, chairman of Canadian Natural Resources Ltd., and
one of Canada's biggest oil investors, predicted Friday that oil
prices could collapse to $30 a barrel before stabilizing at between
$70 and $75, according to Canada-based Financial Post.
Gold(GCG5), swung wildly in the aftermath of Swiss vote to
reject a plan to force the Swiss National Bank to ramp up its
holdings of the precious metals. Gold futures fell as much 2%, but
rebounded to settle above $1,200 an ounce. Silver (SIZ4) also
rebounded sharply and gained more than 5%.
News out of Asia triggered selling in equity markets round the
world. Two separate gauges of Chinese factory activity indicated
manufacturing had lost momentum, despite a recent cut in interest
rates. Then Moody's downgraded Japan to Aa3 from A1, citing
uncertainty that the country will meet its fiscal goals and be able
to grow its economy.
ISM and Black Friday sales: U.S. manufacturers expandedat a
slightly slower, but still robust, pace in November, a survey of
executives found.
Retailers such as Wal-Mart Inc. (WMT), Target Corp. (TGT) and
Amazon.com Inc. (AMZN) 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.
Analysts will be watching to see how sales fare on Cyber Monday,
which is one of the biggest online shopping days of the year.
Quanta Services Inc. (PWR) plunged after BB&T Capital
Markets cut its rating to hold from buy. Newmont Mining Corp (NEM)
was the biggest gainer on the S&P 500, rallying more than 5%.
(Read more about the day's big movers here:
http://www.marketwatch.com/story/mattress-firm-amazon-in-focus-on-monday-2014-12-01.)
Overseas markets: The FTSE 100 index fell sharply as oil and
mining-related stocks tracked volatile commodity prices. Other
European markets also closed lower. With the exception of a gain
for the Nikkei 225 index , Asian stocks were battered by
worse-than-expected outcome for those Chinese manufacturing
surveys. The Australia's S&P ASX 200 index slid 2%, dragged by
energy stocks. The dollar(USDJPY), eased as commodity prices
rebounded.
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