Wall Street Lower As Health, Consumer Stocks Decline
U.S. stocks were lower in early afternoon trading on Monday as health and consumer discretionary stocks declined and investors awaited key economic data including the November jobs report.
Still, the three major indexes were set to end the month higher for the second straight time.
Friday’s non-farm payrolls report is in focus ahead of a mid-December meeting of the Federal Reserve. Economists polled by Reuters expect the economy to have added 200,000 jobs in November.
While the U.S. central bank is likely to raise interest rates for the first time since June 2006, the European Central Bank is expected to unveil fresh monetary easing measures on Thursday.
Other U.S. data expected during the week includes manufacturing and auto sales data for November.
Investors will look for clues regarding the Fed’s decision when Chair Janet Yellen speaks on the economic outlook on Wednesday and gives her testimony on the economy before the congressional Joint Economic Committee on Thursday.
“I think the focus will be on Yellen’s speeches this week,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
“The market has largely priced in a December hike and it would have to take a pretty significant miss with the jobs report to give the Fed some pause before its next meeting.”
Traders are pricing in a 78 percent chance for a rate hike next month, up from 52 percent in the previous month, according to CME Group’s FedWatch.
Data on Monday showed that contracts to buy previously owned U.S. homes rose far less than expected in October, the latest sign that the housing market recovery was losing momentum after strong gains early this year.
At 12:25 p.m. ET the Dow Jones industrial average .DJI was down 38.71 points, or 0.22 percent, at 17,759.78, the S&P 500 .SPX was down 4.99 points, or 0.24 percent, at 2,085.12 and the Nasdaq Composite .IXIC was down 21.07 points, or 0.41 percent, at 5,106.45.
Seven of the 10 major S&P sectors were lower with the health sector’s .SPXHC 1.04 percent fall leading the decliners. Biotech stocks took a beating with Gilead’s (GILD.O) 2 percent fall weighing the most on the S&P and Nasdaq.
U.S. stock indexes ended little changed in light volume on Friday, with consumer stocks falling as investors fretted over early reports on the U.S. holiday shopping season and Disney’s subscriber losses.
Retail stocks continued to be in focus on Cyber Monday, the biggest online shopping day of the year.
Target (TGT.N) shares were down 1.2 percent at $72.56 after its website faced an outage due to heavy traffic. Data showed that other retailers’ website were also affected, including Foot Locker (FL.N) and L Brands’s (LB.N) Victoria’s Secret. The stocks were down about 1.6 percent.
Staples (SPLS.O) fell 1.6 percent to $12.11 after the New York Post reported that U.S. antitrust regulators are preparing to block Staples acquisition of smaller rival Office Depot (ODP.O). Office Depot was down 3.2 percent at $6.53.
Lululemon Athletica (LULU.O) was down 5.4 percent to $49.65 after FBR & Co cut its rating on the Canadian yogawear retailer’s shares to “underperform” from “market perform”, citing concerns about its ability to boost comparable growth.
Declining issues outnumbered advancing ones on the NYSE by 1,504 to 1,488. On the Nasdaq, 1,433 issues fell and 1,300 advanced.
The S&P 500 index showed 15 new 52-week highs and four new lows, while the Nasdaq recorded 97 new highs and 29 new lows.