Stocks fell on Monday after a disappointing reading on U.S. manufacturing activity weighed against an upbeat reading in China.
The S&P 500 closed at 1409.46, down 6.72 points or 0.5 per cent. The blue-chip Dow Jones industrial average closed at 12,965.60, down 59.98 points or 0.5 per cent. In Canada, the S&P/TSX composite index closed at 12,169.74, down 69.62 points or 0.6 per cent.
Major indexes had seen modest gains in earlier trading after China reported that its manufacturing index rose to its highest level in seven months, providing evidence that the country’s economy is turning around after a sluggish period of declining economic growth.
However, the ISM manufacturing index in the United States fell to 49.5 in November from 51.7 in the previous month, putting activity at its lowest point since July 2009. Some economists believe the dip was due to Hurricane Sandy, while others pointed to the effects of the fiscal cliff.
Meanwhile, squabbling between Republicans and Democrats over budget proposals continued, even as the fiscal cliff of automatic tax increases and spending at year-end neared. After last week’s dismissal of Barack Obama’s plan, the Republicans countered with their proposal on Monday, offering $800-billion (U.S.) in additional tax revenue without raising tax rates – or about half of what the President proposed.
Dell Inc. rose 4.4 per cent, closing just above $10 (U.S.) after an analyst at Goldman Sachs raised the recommendation on the stock to “buy” from “sell,” and hiked the price target to $13 from $9.
Ford Motor Co. fell 0.4 per cent after reporting that its new-vehicle sales rose 6.5 per cent in November over last year.
Research In Motion Ltd. fell 0.4 per cent after Canaccord downgraded the stock to a “sell” recommendation, arguing that the recent runup in the share price isn’t justified by fundamentals. RIM shares have risen 88 per cent over the past two months on optimism about the company’s upcoming BlackBerry 10 platform.
Saputo Inc. rose 3 per cent after it signed an agreement to buy dairy products maker Morningstar Foods LLC for nearly $1.5-billion.
Among commodities, crude oil rose to $89.09 a barrel, up 18 cents. Gold rose to $1,721.10 an ounce, up $8.40.