U.S. stocks fluctuate on manufacturing data amid retail reports

U.S. stocks fluctuated, following a three-month advance in the Standard & Poor’s 500 Index (CME:SPZ13), as data showed manufacturing unexpectedly climbed last month and investors assessed reports on holiday retail sales.

Urban Outfitters Inc. lost 3.8% as retail spending fell on the weekend after Thanksgiving for the first time since 2009. EBay Inc. climbed 1.9% as a report showed online spending on Black Friday rose to a record. Newmont Mining Corp., the world’s second-largest gold producer, slipped 3.8% as the precious metal’s price declined. 3M Co. lost 3.5% after Morgan Stanley downgraded the stock.

The S&P 500 fell less than 1 point to 1,805.48 at 2:54 p.m. in New York after earlier rising as much as 0.2%. The Dow Jones Industrial Average dropped 39.98 points, or 0.3%, to 16,046.43. Trading in S&P 500 stocks was 16% lower than the 30-day average at this time of day.

“It seems like a sleepy day after Thanksgiving, nothing exciting going on,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone. His firm oversees about $1.8 billion. “Investors are probably waiting to see if there’s any news from the Fed later in the month and trying to get a read on retail sales.”

The S&P 500 climbed 2.8% last month and has gained 27% this year, poised for the best annual performance since 1998, after the Federal Reserve refrained from tapering its third round of economic stimulus. The central bank next meets Dec. 17-18. The index ended November with its eighth straight weekly advance, the longest rally in almost a decade, as data on employment and consumer sentiment boosted confidence in economic growth.

Factory Data

The Institute for Supply Management’s factory index rose to 57.3 in November from 56.4 a month earlier, the Tempe, Arizona- based group’s report showed today. The median projection in a Bloomberg survey of 77 economists called for a drop to 55.1. Estimates ranged from 53.5 to 57.5. Manufacturing accounts for about 12% of the economy.

A separate report from Markit Economics showed the final November index of U.S. manufacturing increased to 54.7 from 51.8 the previous month. The median forecast in a Bloomberg survey of economists called for no change from the preliminary November reading of 54.3. Other reports showed manufacturing in the euro area, U.K. and China expanded faster than estimated.

The Labor Department’s jobs report on Dec. 6 is forecast to show the U.S. added 180,000 jobs last month and the unemployment rate slipped to 7.2%, matching the lowest level in five years. The weakest employment recovery in seven decades is proving a boon to equity markets.

$14 Trillion

Five years into a rally that has restored $14 trillion to share prices, U.S. payrolls remain 1.5 million below the level in 2008, according to data compiled by Bloomberg. Resistance to hiring from ConocoPhillips to Walt Disney Co. will help push S&P 500 profit margins above 10% next year, the highest ever, data show. Below-average employment was cited last month by Fed chairman nominee Janet Yellen as the biggest obstacle to raising interest rates.

December has been the second-best month for U.S. equity returns, according to data compiled by Bloomberg that starts in 1928. The average return for the month is 1.5%, more than twice the overall monthly mean of 0.6%. Should stocks match their historic gains this month, it would put the index at 1,832.90 by the end of the year.

U.S. retailers are coming off the first spending decline on a Black Friday weekend since 2009. Purchases at stores and websites fell 2.9% to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.

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