Wall St down as China, US shoppers disappoint

Specialist Michael Gagliano, left, who handles energy stocks, works with traders on the floor of the New York Stock Exchange. File photo / AP

Wall Street fell amid disappointing manufacturing data from China as well as Europe and after a report showed that the start of the US holiday sales season was weaker than expected.

China's manufacturing industry cooled in November, as the official purchasing managers index fell to 50.3, while the HSBC manufacturing PMI weakened to 50, a six-month low.

"Today's data suggest that the manufacturing sector lost momentum and point to weaker economic activity in November," Hongbin Qu, chief economist, China & co-head of Asian economic research at HSBC, said in a statement. Last month's rate cuts by the People Bank of "will help to stabilise property and manufacturing investment in the coming months. We continue to expect further monetary and fiscal easing measures to offset downside risks to growth."

Also dampening the mood was a decline in the amount of money American shoppers spent over the four days from Thanksgiving Day through Sunday. Total spending is expected to reach US$50.9 billion, down from last year's estimated US$57.4 billion, the National Retail Federation said in a statement on Sunday.

In afternoon trading in New York, the Dow Jones Industrial Average fell 0.04 per cent, the Standard & Poor's 500 Index declined 0.44 per cent, while the Nasdaq Composite Index dropped 0.9 per cent.

Slides in shares of General Electric and those of Caterpillar, both down 2 per cent, led the Dow lower.

Shares of Apple dropped, last trading 2.7 per cent lower at US$115.68 after earlier falling as low as US$111.27.

"Being as big and visible as it is, some people use Apple as a proxy for worldwide consumer technology," John Manley, chief equity strategist for Wells Fargo Funds Management in New York, told Bloomberg News. "Little hiccups can be translated into rather large spasms from time to time."

Oil prices rose more than 3 per cent as some found value after the slump to the lowest level in five years that followed Opec's decision last Thursday to maintain its collective output ceiling of 30 million barrels a day.

"The failure of last week's Opec meeting has had a tremendous impact," John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, told Bloomberg News. "Prices have fallen a great deal, which is going to bring the value buyers out of the woodwork."

In Europe, the Stoxx 600 Index finished the session with a drop of 0.5 per cent from the previous close. Germany's DAX Index fell 0.2 per cent, France's CAC 40 retreated 0.3 per cent, while the UK's FTSE 100 Index shed 1 per cent.

Markit Economics' manufacturing PMI for the euro zone fell to its lowest level since June 2013, sliding to 50.1 in November, from 60.6 in October.

"With the final PMI coming in below the flash reading, the situation in euro area manufacturing is worse than previously thought," Chris Williamson, chief economist at Markit, said in a statement.

"Not only is the performance of the sector the worst seen since mid-2013, there is a risk that renewed rot is spreading across the region from the core," Williamson said. "The sector has more or less stagnated since August, but we are now seeing, for the first time in nearly one-and-a-half years, the three largest economies all suffering manufacturing downturns."