Stocks slip on manufacturing numbers


Share
Posted Online: Dec. 03, 2012, 10:51 pm
Comment on this story | Print this story | Email this story
The Associated Press
NEW YORK (AP) — Stocks edged lower on Wall Street Monday after a surprisingly weak manufacturing report heightened concern that fiscal deadlock in Washington is already hurting the economy.

The Dow Jones industrial average fell 59.98 points to close at 12,965.60. The Standard and Poor's 500 dropped 6.72 points to 1,409.46. The Nasdaq composite was down 8.04 points to 3,002.20

U.S. manufacturing declined in November to its weakest level since July 2009, the Institute for Supply Management reported. The ISM's index fell to 49.5 from 51.7 a month earlier, below the 51.2 reading forecast by analysts. Any number below 50 on the scale means that manufacturing is contracting. Businesses expressed concerns about the "fiscal cliff," a series of sharp government spending cuts and tax increases scheduled to start Jan. 1 unless an agreement is reached to cut the budget deficit.

"The ISM numbers probably took a little air out of what was some hope for better news on where the economy is going," said Jim Dunigan, executive vice president at PNC Wealth Management in Philadelphia. "We're still in the camp that this gets resolved and we don't go over the cliff, but there's a lot of angst between now and then."

The White House and Congress are still seeking to hammer out a budget deal that will avoid the "cliff." Republicans, led by House Speaker John Boehner, have balked at President Barack Obama's opening proposal of $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.

House Republicans on Monday proposed their own 10-year blueprint to President Barack Obama that calls for increasing the eligibility age for Medicare and lowering cost-of-living hikes for Social Security benefits.

"There's a sense of insecurity until the President and Boehner get their act together," said Ben Schwarz, chief market strategist at New York-based brokerage Lightspeed Financial. "If they put together a package in short order, if they do it in the next couple of weeks, you'll see a strong rally."

Stocks have fluctuated since the Nov. 6 election as investors worried that a deal may not be reached in time to avoid the tax hikes and spending cuts, which economists say could push the U.S. back into recession. The S&P 500 is still 1.3 percent below its closing level on the day that Americans went to the polls, having fallen as much as 5 percent in the weeks following the election.

Wall Street opened higher Monday following news that manufacturing in China, the world's second-largest economy, grew for the first time in 13 months and after Greece announced details of a bond buyback program. The Dow had been up as much as 62 points shortly after the opening bell.

December is historically the best month for stocks. The S&P 500 has advanced an average of 2 percent over the past 30 years during the month of December, according to research from Schaeffer's Investment Research. The next best month is April, with an average return of 1.7 percent. The worst month is September, where investors lose an average of 0.7 percent.

The yield on the 10-year Treasury note rose 1 basis point to 1.62 percent.

Other stocks making big moves:

—Dell rose 42 cents, or 4.4 percent, to $10.06 after Goldman Sachs raised its rating to "Buy" from "Sell." Goldman cited Dell's healthy cash balance and said a recent decline in the stock may have been overdone. Dell has slumped this year as consumers migrated away from desktop PCs and laptops to portable devices such as tablets and phones.

— Health Management Associates fell 45 cents, or 5.7 percent, to $7.50 after the CBS news program "60 Minutes" broadcast a segment critical of the company's patient admission policies. The program included interviews with former employees who said HMA pressured its emergency room doctors to admit patients.

—Supervalu jumped 30 cents, or 12.6 percent, to $2.68 following a report that private equity firm Cerberus is considering multiple options for buying parts of the struggling grocery store chain.

















 



Local events heading








  Today is Thursday, April 24, the 114th day of 2014. There are 251 days left in the year.

1864 -- 150 years ago: We learn that it is a contemplation to start a paper mill in Rock Island during the summer by a gentleman from the East.
1889 -- 125 years ago: The gates of Oklahoma were swung open at noon today, and a throng of more than 30,000 settlers started over its soil.
1914 -- 100 years ago: The Iowa Coliseum Co. was incorporated with $40,000 capital and planned a building on 4th Street between Warren and Green streets in Davenport.
1939 -- 75 years ago: Plans are being discussed for resurfacing the streets in the entire downtown district of Rock Island.
1964 -- 50 years ago: Some 45 jobs will be created at J.I. Case Co.'s Rock Island plant in a expansion of operations announced yesterday afternoon at the firm's headquarters in Racine, Wis.
1989 -- 25 years ago: Gardeners and farmers cheered, but not all Quad-Citians found joy Saturday as more than an inch of rain fell on the area. Motorists faced dangerous, rain-slick roads as the water activated grease and grime that had built up during dry weather.








(More History)