U.S. stocks declined for a second day after holiday spending in America slowed and gauges of manufacturing in China and Germany dropped. Oil rebounded from the lowest in five years and gold rallied.
The Standard & Poor’s 500 Index lost 0.5 percent at 1:04 p.m. in New York, after paring losses following a better-than- forecast report on U.S. manufacturing. The Nasdaq 100 Index fell 0.9 percent as Apple Inc.(NYSE:AAPL) slid 2.6 percent. West Texas Intermediate crude surged 3.8 percent to $68.64 a barrel, after falling to $63.72, the lowest since July 2009. Gold climbed from a three-week low. The yield on 10-year Treasuries climbed 4 basis points to 2.21 percent and the Bloomberg Dollar Spot Index dropped 0.5 percent.
U.S. consumers cut spending by an estimated 11 percent over the post-Thanksgiving weekend before Cyber Monday’s e-commerce sales. Reports showed Chinese and German manufacturing dropped last month, while the Institute for Supply Management’s data on U.S. factories topped estimates. Crude oil rebounded from the lowest level in more than five years as the market selloff prompted by OPEC’s failure last week to curb production took a pause.
“Chinese data is starting to give investors pause about global growth,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “If we can stabilize oil here, that would be a positive for the market, but a continued deterioration will lead to more instability and real concerns for the market.”
The S&P 500 dropped as much as 0.8 percent in the first half hour of trading after Apple plunged 6.4 percent, the most since January. Equities briefly pared losses as Apple trimmed its declines and data showed manufacturing in the U.S. grew in November at a faster pace than projected.
The ISM’s factory index in the U.S. was little changed at 58.7 last month, the second-strongest level since April 2011, compared with 59 in October, the Tempe, Arizona-based group’s reported today. It exceeded the median forecast of 80 economists surveyed by Bloomberg and readings greater than 50 indicate growth.
“The ISM number might’ve complicated things a little bit, but we weren’t able to hold the rally,” Gene Peroni, a fund manager at Advisors Asset Management Inc. in Conshohocken, Pennsylvania, said in a phone interview. His firm oversees $14.7 billion. “There’s a lot of rotation here in the market right now.”
A report from the National Retail Federation showed U.S. consumers spent an estimated 11 percent less than last year over the four days through November 30. It’s the second year in a row that Thanksgiving sales fell during a period famous for long lines and frenzied crowds.
The slower foot traffic means retailers will have to wring more money from consumers in December, including during today’s Cyber Monday e-commerce blitz.
“There were disappointing holiday sales over the weekend and now basically retail, online, anything Internet is really getting hit today,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said via phone.
Amazon.com Inc., Facebook Inc. and Yahoo! Inc. dropped more than 2.4 percent.
Apple lost 2.6 percent, paring steeper losses earlier in the day. About $40 billion of market value was erased and then mostly restored as shares of the Cupertino, California-based iPhone maker slumped along with other technology stocks. The decline was fastest between 9:50 a.m. and 9:51 a.m., when more than 6 million Apple shares traded at prices from $117 to $111.27 in more than 30,000 different trades.