Benchmarks ended in negative territory on Monday as
Thanksgiving weekend sales failed to ignite bullish sentiment
among investors. Retail stocks were sold heavily, thereby
dragging the retail sector and the broader markets. Meanwhile,
the upbeat ISM manufacturing report was ignored as investors
cautiously await key labor data on Friday. The drop on Cyber
Monday comes after the benchmarks notched a record eight
consecutive weeks of gains last Friday.
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Ahead of Wall Street
The Dow Jones Industrial Average (DJI) declined 0.5% to close the
day at 16,008.77. The S&P 500 slipped 0.4% to finish Monday's
trading session at 1,800.90. The tech-laden Nasdaq Composite
Index decreased 0.4% to end at 4,045.26. The fear-gauge CBOE
Volatility Index (VIX) advanced 3.9% to settle at 14.23. Total
volume on the consolidated volumes on the New York Stock
Exchange, American Stock Exchange and Nasdaq were roughly 5.2
billion shares. Declining stocks outnumbered the advancers. For
70% shares that declined, 27% advanced.
Holiday shoppers were found spending nearly 3% lesser in
comparison to last year's Thanksgiving sales. The drop came
despite the fact that a record number of people visited shops.
According to a retail trade group, Thanksgiving weekend spending
suffered its first ever decline since the group started tracking
the numbers in 2006.
The National Retail Federation reported that retail sales were
down 2.7% to $57.4 billion during the Thanksgiving weekend. This
occurred despite a 27% jump in Thanksgiving shoppers. The report
also stated that the average spend of shoppers declined 6% to
$407.02, largely due to reduced prices.
The dismal sales data made investors jittery who chose to sell
retail stocks. Subsequently, shares of J.C. Penney Company, Inc.
), Target Corporation (NYSE:
) and Coach, Inc. (NYSE:
) dropped nearly 2% each. Urban Outfitters, Inc. (NASDAQ:
) slumped by nearly 4%.
The SPDR S&P Retail (ETF) (NYSEARCA:
) lost 0.7% and was one of the losing sectors among the S&P
industry groups. Stocks such as Office Depot Inc. (NYSE:
), PriceSmart, Inc. (NASDAQ:
), Safeway Inc. (NYSE:
), Amazon.com, Inc. (NASDAQ:
), and Ascena Retail Group Inc. (NASDAQ:
) declined 1.7%, 1.2%, 1.1%, 0.3%, and 2.0%, respectively.
The Consumer Staples SPDR (XLP) lost 0.5% and was a major loser
among S&P 500 industry groups. Stocks such as The Procter
& Gamble Company (NYSE:
), The Coca-Cola Company (NYSE:
), Philip Morris International Inc. (NYSE:
), CVS Caremark Corporation (NYSE:
), and PepsiCo, Inc. (NYSE:
) declined 1.0%, 0.3%, 0.6%, 0.5%, and 0.9%, respectively.
ISM manufacturing index data for the month of November was
published on Monday. The report provided further evidence of
growth in the U.S. economy. ISM data added to expectations that
The Federal Reserve may begin soon begin tapering its $85 billion
bond buying program. The situation will clearer after the Fed's
policy meeting scheduled on December 18.
According to the Institute of Supply Management, the Purchasing
Manager Index (PMI) for November increased to 57.3% from
October's figure of 56.4%. This is also above the consensus
estimate of 55.1%. The PMI has increased in a progressive manner
with November's reading being the highest in 2013. The New Orders
Index increased by 3% to 63.6%. The Production Index increased by
2% to 62.8%.The Employment Index also increased by 3.3% to 56.5%
and is above October's reading of 53.2%. This was also the
highest reading since April 2012. Of the 18 manufacturing
industries, 15 reported growth in November.
Separately, construction spending in October was reported to have
increased by 0.8% to $908.4 billion from September's $901.2
billion. It was also above the consensus estimate of a 0.4% gain.
The U.S. Census Bureau of the Department of Commerce also
reported that spending on private construction was at a
seasonally adjusted annual rate of $625.7 billion, 0.5% below
September's figure of $629.0 billion. Residential construction
was at $326.9 billion in October, 0.6% down from September.
October month's nonresidential construction came in at a
seasonally adjusted annual rate of $298.9 billion in October,
0.5% below September's $300.2 billion.
The energy sector was the biggest gainer among the S&P 500
industry groups on Monday. The Energy SPDR (XLE) gained 0.1%.
Stocks such as Exxon Mobil Corporation (NYSE:
), Pioneer Natural Resources (NYSE:
), National-Oilwell Varco, Inc. (NYSE:
), Phillips 66 (NYSE:
), and Valero Energy Corporation (NYSE:
) added 0.04%, 0.2%, 0.2%, 0.5% and 2.4%, respectively.