By Wallace Witkowski and William Watts, MarketWatch
Energy shares hit as crude slides; ISM weaker than forecast
U.S. stocks finished lower Monday following weak economic data
and a further slump in crude-oil prices, but managed to pare early
losses.
Stocks had been in clear retreat after the Institute for Supply
Management's closely watched manufacturing survey for July
(http://www.marketwatch.com/story/ism-manufacturing-data-released-early-has-soft-tone-2015-08-03),
along with a similar report from Markit, came in weaker than
expected.
Also, June construction spending grew 0.1%, well below
expectations
(http://www.marketwatch.com/story/us-construction-spending-slows-to-01-gain-in-june-2015-08-03).
Ahead of the opening bell, data from the Commerce Department showed
personal spending rose slightly less than expected in June, while
income was slightly above forecasts.
The Dow Jones Industrial Average finished down 91.66 points, or
0.5%, at 17,598.20, after being down as much as 193 points during
the session. The biggest losers on the index were Chevron
Corp.(CVX), which closed down 3.3%, and Apple Inc.(AAPL), which
shed 2.4%.
The S&P 500 index declined 5.8 points, or 0.3%, to finish at
2,098.04, after being down nearly 17 points earlier in the session.
While utilities had been the sole gaining sector for most of the
session, the consumer staples, telecom, financial and health care
sectors managed to turn in slight gains. The energy sector led
decliners with a 2% loss.
On Friday, the S&P 500 closed down 0.2%
(http://www.marketwatch.com/story/us-stocks-sp-eyes-2-rise-for-month-but-month-end-volatility-seen-2015-07-31),
dragged lower by the energy sector, but the benchmark gained 1.2%
for the week and 2% for the month.
The overall S&P 500 stands 1.7% off its record close in May,
having traded in a narrow range for several months. More
range-bound trading, or "numbness
(http://www.marketwatch.com/story/golds-fire-sale-offers-refuge-on-feds-bumpy-road-to-rate-hikes-2015-07-31),"
as a recent Need To Know column called it, could be ahead until
Friday, with investors staying on the sidelines as they wait for
the monthly U.S. jobs report due that day.
The Nasdaq Composite declined 12.9 points, or 0.3%, to close at
5,115.38. Earlier in the session, the index was down as much as 46
points.
What strategists are saying: Not much can be read into any one
day's action seeing that stocks made a nice upward move last week,
said Dan Greenhaus, chief strategist at BTIG, in emailed
comments.
"Randomness is going to be at work for some time," Greenhaus
said.
"Over the past few months, the U.S. equity markets have been
undulating inconclusively between 2050 and 2130," said Sam Stovall,
U.S. equity strategist for S&P Capital IQ, in a Monday note. He
isn't that upbeat about what could happen this month.
August historically has been "among the worst performing
months," and some indicators suggest more volatility ahead, Stovall
said. Investors also "have been in a 'risk-off' mind-set since the
final new high was established in May."
"Another month has gone by, and U.S. equities are still awaiting
a resolution to their nine-month trading range," said Jonathan
Krinsky, chief market technician for MKM Partners, in a note
Sunday.
He said the difference between the top- and worst-performing
industries in the S&P 500 continues to grow. "At some point,
this divergence needs to be rectified, but for now the beat goes
on," Krinsky wrote.
Read: 'Pipsqueak' Greece gets slammed, fueling fears over U.S.
markets
(http://www.marketwatch.com/story/get-ready-for-us-bubble-to-burst-as-pipsqueak-greece-gets-slammed-2015-08-03)
Other markets: Asian shares closed lower Monday
(http://www.marketwatch.com/story/asian-markets-fall-as-chinese-factory-data-prompts-jitters-2015-08-03)
after disappointing Chinese manufacturing data and a continued
slide in commodity prices. European equities mostly gained
(http://www.marketwatch.com/story/european-stocks-edge-up-greek-index-slides-as-trading-resumes-2015-08-03)
even as Greek stocks plunged as trading resumed in Athens
(http://www.marketwatch.com/story/greek-stock-market-dives-after-trading-resumes-2015-08-03).
Crude-oil futures fell sharply, with Brent crude dipping below
$50 a barrel for the first time since January
(http://www.marketwatch.com/story/oil-falls-to-4-month-low-hit-by-data-on-china-rigs-2015-08-03).
Gold dipped and the dollar was little changed.
Economic news: The Commerce Department on Monday said personal
spending by U.S. consumers rose 0.2% in June
(http://www.marketwatch.com/story/consumers-increase-spending-a-mild-02-in-june-2015-08-03),
while personal income grew by 0.4%. Economists polled by
MarketWatch had forecast a rise of 0.3% for both measures.
The Institute for Supply Management's July manufacturing index
fell to 52.7%
(http://www.marketwatch.com/story/early-release-of-ism-index-shows-drop-to-527-in-july-2015-08-03)
from 53.5% in June. That is below the forecast of 53.7% expected by
economists. See:
Stock movers: Shares of Tyson Foods Inc.(TSN) fell 10% after the
meatpacker missed profit expectations and cut its full-year outlook
(http://www.marketwatch.com/story/tyson-profit-and-sales-fall-short-lowers-outlook-2015-08-03).
Shares of Fiat Chrysler (FCA.MI) rose 2.2% after the company
reported July U.S. auto sales.
Read more in MarketWatch's Movers & Shakers column
(http://www.marketwatch.com/story/aig-tyson-clorox-earnings-in-focus-2015-07-31)
--Victor Reklaitis in London contributed to this article.
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