US stocks fell on Monday as energy stocks, including Exxon Mobil Corp, tumbled on a big drop in oil prices and retailers lost ground on worries that a strong start to the holiday season may be fleeting.
Also helping stall one of the market's longest winning streaks of the year was a report showing a bigger-than-expected drop in US existing home sales, which fed fears that consumer confidence might slip and hurt consumer spending. Even though Wal-Mart Stores Inc, the world's largest retailer, reported a better-than-expected start to the holiday shopping season, investors worried that deep discounting drove store traffic at many retailers, raising concerns about stores' future profitability.
Wal-Mart shares dropped 0.9 percent to $50 on the New York Stock Exchange and were among the biggest factors causing the Dow to stall after six straight days of gains. The Dow Jones industrial average was down 40.90 points, or 0.37 percent, at 10,890.72. The Standard & Poor's 500 Index was down 10.78 points, or 0.85 percent, at 1,257.47. The technology-laced Nasdaq Composite Index was down 23.64 points, or 1.04 percent, at 2,239.37.
A National Association of Realtors report showed that US existing home sales fell in October to 7.09 million units, compared with analysts' expectation of 7.17 million. The inventory of unsold houses rose to the highest level in nearly 20 years.
Drug maker Merck & Co Inc also weighed heavily on blue chip stocks, losing 4.6 percent to $29.56 as investors doubted that a major restructuring, announced on Monday, would help Merck's earnings next year. Merck announced as many as 7,000 job cuts. Doubts about holiday buying also took a toll on the technology sector, with shares of eBay Inc, the online auctioneer, dropping 2.9 percent to end at $45.37 on Nasdaq.
EBay was the biggest drag on Nasdaq, which, along with the S&P 500 index, snapped a 7-day winning streak.
Giri Cherukuri, head trader at OakBrook Investments LLC, said, "I wouldn't read too much into today's down draft, but how holiday sales come out is going to be key and that would drive the market." The Dow Jones US home-builders index registered its biggest one-day percentage drop in nearly 3 weeks, falling 3.6 percent, and the Standard & Poor's Retail Index shed 1.6 percent.
Among home builders, shares of KB Home fell 3.2 percent to end at $69.63 on the New York Stock Exchange and shares of D.R. Horton Inc fell 2.9 percent to close at $35.57.
January crude oil futures ended down $1.35 at $57.36 per barrel on the New York Mercantile Exchange. Among energy stocks, Exxon Mobil dropped 2.3 percent to $58.74, Chevron shed 2.3 percent to end at $57.18 and ConocoPhilips fell 3.6 percent to $61.73. The American Stock Exchange index of oil companies registered its biggest one-day percentage drop in about a month.
Volume was active on the NYSE, where about 1.49 billion shares changed hands, above last year's daily average of 1.46 billion. On the Nasdaq, volume was about 1.59 billion compared with last year's daily average of 1.81 billion.
Comments
Comments are closed.