Why Stocks Bowed on Monday
Disappointing non-manufacturing PMI reports from both the ISM and Markit Economics sent stocks lower on Monday.
Stocks retreated moderately on Monday after both Markit Economics and the Institute for Supply Management reported lower non-manufacturing PMI readings for December. The ISM’s December 2013 Non-Manufacturing Report on Business indicated that the NMI (Non-Manufacturing Index) dropped to 53 percent in December from November’s 53.9 percent. Economists were expecting an increase to 54.8 percent.
The Markit U.S. Services PMI declined to 55.7 from November’s 55.9 and the “flash” reading of 56.0. The Markit U.S. Composite PMI dipped to 56.1 from November’s 56.2. For all PMI reports, a reading above 50 indicates expansion and a reading below 50 indicates contraction.
The Dow Jones Industrial Average (NYSEARCA:DIA) lost 44 points to finish Monday’s trading session at 16,425 for a 0.27 percent decline. The S&P 500 (NYSEARCA:SPY) fell 0.25 percent to finish at 1,826. The Nasdaq 100 (NASDAQ:QQQ) declined 0.33 percent to finish at 3,526. The Russell 2000 (NYSEARCA:IWM) dropped 0.77 percent to end the day at 1,147.
In other major markets, oil (NYSEARCA:USO) fell 0.53 percent to close at $35.37. On London’s ICE Futures Europe Exchange, February futures for Brent crude oil advanced 21 cents (0.20 percent) to $107.10/bbl. (NYSEARCA:BNO). February gold futures declined $1.70 (0.14 percent) to $1,236.90 per ounce (NYSEARCA:GLD).Transports drove off a cliff on Monday, as the Dow Jones Transportation Average (NYSEARCA:IYT) fell 1.30 percent.