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By Ellie Ismailidou and Barbara Kollmeyer, MarketWatch

Retail in the spotlight after weekend of holiday shopping

U.S. stocks edged lower Monday afternoon but remained on track to post modest monthly gains, as investors weighed the kickoff of the holiday shopping season along with weaker-than-expected economic data ahead of a busy week of economic releases and central-bank watching.

The S&P 500 was down 1.2 points, or less than 0.1%, at 2,088. The Dow Jones Industrial Average fell 5 points, or less than 0.1%, to 17,793. The Nasdaq Composite lost 8 points, or 0.2%, at 5,119.

The major indexes were left mostly flat in last week's holiday-shortened trade. For November, the Nasdaq Composite is looking at a gain of around 1.3%, while the Dow industrials and S&P 500 index are less buoyant, set to add around 0.7% and 0.4%, respectively.

An uptick in oil prices gave energy shares a boost on the day, with the energy sector leading the S&P 500 Monday afternoon, up 0.9%. Meanwhile, financials looked on track to be the best performer on the S&P 500 for the month, eyeing a 2.2% rise, as investors anticipated that an interest-rate hike may boost bank net-interest income.

Meanwhile, traders were also looking to the retail sector to add some end-of-month sparkle, though there were concerns about slower-than-expected Black Friday sales in stores. Some were worried that if early returns on Cyber Monday sales are also weak, then that could dampen what appetite is out there for retail stocks (http://www.marketwatch.com/story/holiday-sales-wage-data-likely-to-drive-stocks-this-week-2015-11-29). A National Retail Federation survey on Sunday found that more people shopped online than in stores during the holiday weekend (http://www.marketwatch.com/story/online-shopping-tops-stores-on-black-friday-weekend-2015-11-29-19103331).

The retail outlook for the holiday season is relatively modest, with analysts looking at a 3% increase, said Randy Frederick, managing director of Schwab Center for Financial Research

"But it's very early in the process, as Black Friday is only one piece of the puzzle," Frederick said, adding that investors should look for data at least a couple weeks into December for a more informed view of the sector. (http://www.marketwatch.com/story/dont-expect-saudi-arabia-to-back-down-when-opec-meets-2015-11-25)

Central-bank watching: This week could be volatile for markets, with a policy meeting at the European Central Bank on Thursday and speeches by Federal Reserve Chairwoman Janet Yellen on the docket. Friday brings the last batch of U.S. jobs numbers before the Fed's December policy meeting and a meeting of the Organization of the Petroleum Exporting Countries.

Economic data on Monday came in below expectations, with the Chicago PMI, or business barometer, falling back into contractionary territory in November (http://www.marketwatch.com/story/chicago-pmi-tumbles-back-into-contractionary-territory-in-november-2015-11-30). This was the last major regional release before the Institute for Supply Management's manufacturing gauge, set for release on Tuesday morning. Meanwhile, pending home sales edge up 0.2% in October (http://www.marketwatch.com/story/pending-home-sales-edge-up-02-in-october-2015-11-30), following two months of declines.

Later this week, a steady trickle of data builds to the November nonfarm payrolls report on Friday.

Barring a surprise on the downside in the upcoming data releases, investors are largely expecting that the Fed will hike rates in December. The market-implied probability of a December rate increase was 78% Monday morning, according to the CME Group's FedWatch Tool (http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html), which tracks Fed-funds futures prices.

See: November jobs report likely to give Fed go-ahead to raise interest rates (http://www.marketwatch.com/story/november-jobs-report-likely-to-give-fed-go-ahead-to-raise-interest-rates-2015-11-29).

"The question should now shift however to how the economic data stacks up in moving towards a second hike in early 2016," said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.

This is particularly important for the U.S. dollar, Boockvar added, "in the context of the large bullishness of it based predominantly on the fact that the Fed's monetary policy is diverging from everyone else."

Investors will also be watching closely speeches by the Fed's Yellen on Wednesday and Thursday. On Thursday, they'll look to see whether ECB President Mario Draghi delivers further easing as expected, and whether any action taken will be enough to keep markets happy.

The market is in position to rally and could reach record highs by the end of the year, said Peter Cardillo, chief market economist at First Standard Financial. He added that a potential Fed hike has largely been factored in.

"I still think we'll see new highs, between 2,175 and 2,200 by year-end [on the S&P 500], in spite of a possible change in monetary policy and in spite of a strong dollar," he said. "The fact that the ECB is likely to increase stimulus is a plus for global equities."

Stocks to watch:

Amazon.com Inc. (AMZN) is among the retailers in the spotlight as investors get ready to assess the holiday weekend of sales. Amazon's shares inched 0.3 lower Monday afternoon, while Under Armour shares (UA) lost 3.7%.

Shares of Microsoft Corp. (MSFT) rose 1.7% after the company got upgraded to strong buy from market perform at Raymond James, and Fitbit (FIT) shares rose 3.1% after the company got upgraded to overweight from equalweight at Barclays.

Computer Sciences Corp. shares (CSC) rose 6%, after the company began trading as two separate companies Monday after the spinoff of its public-sector company as CSRA Inc (http://www.marketwatch.com/story/computer-sciences-spins-off-into-2-separate-companies-2015-11-30-91035350). CSRA's (CSRA) shares rose 5.8%.

Other markets:Oil prices (http://www.marketwatch.com/story/oil-prices-pause-ahead-of-central-bank-opec-meetings-2015-11-30) turned higher Monday ahead of another major event this week, the OPEC meeting on Friday, but looked poised for monthly loss of more than 10%. Pressure is building on Saudi Arabia to cut oil output, but many say the kingdom is unlikely to change its approach (http://www.marketwatch.com/story/pressure-builds-on-saudi-arabia-before-fridays-opec-meeting-2015-11-30).

Gold prices edged higher Monday but suffered a monthly drop of 6.7%, the biggest monthly loss in over two years (http://www.marketwatch.com/story/gold-dips-set-for-biggest-monthly-loss-in-more-than-2-years-2015-11-30). The dollar (http://www.marketwatch.com/story/dollar-pinned-down-as-ecb-and-us-payrolls-line-up-this-week-2015-11-30), meanwhile, was eyeing the best month since January, boosted by rising rate-hike expectations.

The Stoxx Europe 600 index (http://www.marketwatch.com/story/european-stocks-climb-ahead-of-key-policy-data-week-2015-11-30) rose 2.7% for November, a second-straight month of gains. In Asia (http://www.marketwatch.com/story/china-november-stock-gains-nearly-wiped-out-by-broker-probe-2015-11-30), the Shanghai Composite managed a 1.9% gain for November, but much of the month's gains were wiped out by an investigation into China's biggest brokerage houses. The index is up just 16% from its Aug. 26 bottom.

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(END) Dow Jones Newswires

November 30, 2015 15:05 ET (20:05 GMT)

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