Dow, S&P fall for third straight day; retail weighs

NEW YORK Tue Dec 3, 2013 4:42pm EST

1 of 4. Specialist trader Michael Pistillo (R) gives a price to trader Greg Rowe on the floor of the New York Stock Exchange December 3, 2013.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - The Dow and the S&P 500 fell for a third straight day on Tuesday, dropping from record levels in a broad decline as investors took profits amid signs of a weak holiday shopping season.

Retail and consumer discretionary stocks were among the weakest of the day. Amazon.com Inc (AMZN.O) slipped 2 percent to $384.66 and was one of the biggest drags on the S&P 500. The S&P retail index .SPXRT shed 0.8 percent after the holiday shopping season got off to a tepid start.

Earlier-than-usual online holiday discounts were expected to have dampened Cyber Monday sales in the United States. Still, data firm comScore forecast U.S. online sales to have hit $2 billion on "Cyber Monday," the highest since the firm began tracking such information.

"Retail sales have been mixed, and while I suspect they will be strong overall at the end of the season, right now, investors are looking for reasons to sell after the amazing returns we've seen over the past several weeks," said Joseph Tanious, global market strategist at J.P. Morgan Asset Management in New York.

Equities have rallied recently, with the S&P 500 gaining for eight straight weeks and hitting a series of record highs. The benchmark index is up 25.9 percent so far this year.

The Dow Jones industrial average .DJI fell 94.15 points, or 0.59 percent, to end at 15,914.62. The Standard & Poor's 500 Index .SPX declined 5.75 points, or 0.32 percent, to finish at 1,795.15. The Nasdaq Composite Index .IXIC dropped 8.06 points, or 0.20 percent, to close at 4,037.20.

The S&P consumer discretionary sector index .SPLRCD fell 0.9 percent, despite stronger-than-expected November auto sales. Ford Motor (F.N) shares slid 2.9 percent to $16.56 while General Motors (GM.N) dropped 2.5 percent to $38.14. Analysts said the declines in the automakers' stocks were linked to concerns that pent-up demand would no longer support the pace of sales gains beyond 2014.

Bucking the sector's weakness, Tesla Motors (TSLA.O) jumped 16.5 percent to $144.70 on heavy volume after Morgan Stanley named it a "top pick." Tesla said on Monday that Germany's vehicle regulatory agency said it planned "no further measures" after reviewing fires in Tesla cars in the United States and Mexico.

Investors speculated that the Federal Reserve may move to trim its stimulus earlier than some had anticipated. Stronger-than-expected data on manufacturing and construction spending on Monday underscored views that the Fed may begin scaling back its stimulus of $85 billion in monthly bond purchases sooner than expected.

Many analysts still forecast the announcement will take place in March, but investors will be closely watching this week's jobs figures on Friday for trends that could influence the Fed's thinking.

In an interview, John Williams, president of the San Francisco Federal Reserve Bank, said he expected the stimulus program to end sometime in 2014, and that he would be disappointed if it was still in effect in December 2014.

In company news, Yum Brands Inc (YUM.N) fell 2.7 percent to $75.61 after it said November sales at established KFC restaurants in China failed to grow despite a successful promotion. It forecast a return to earnings-per-share growth in 2014.

Apple Inc (AAPL.O) rose 2.7 percent to $566.32 after UBS upgraded the iPhone maker's stock to "buy."

About 5.28 billion shares traded on all U.S. platforms, according to BATS exchange data.

Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 3 to 2, while on the Nasdaq, nearly eight stocks fell for every five that rose.

(Editing by Jan Paschal)

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Comments (8)
jw_collins wrote:
Baloney with a yawn chaser. The Fed has shown itself to be the fools of the fiscally foolish, attempting to do the job Congress should have been doing, thus simultaneously ruining savers, retirees, enabling Congressional bad behavior, and putting the economy on a permanent diet of free cash all channeled to the top one percent with no strings attached. The Fed has no courage, it has no sense of history, it has no perspective, and shows itself to be the protector of the wealthy and the reverse Robin Hood of our time. It bleeds the masses to compensate for Congressional largess, encouraging more of the same. Bernanke has been talking “rewind” for years. So will Yellin. As long as inflation doesn’t hit 1930′s German levels, they’ll defy fiscal gravity. They do it because it’s the easy road, even as they know it’s fatal long term.

Dec 03, 2013 8:39am EST  --  Report as abuse
Afrodo wrote:
To those who missed it, M2 Money supply contracted the whole month of November. Is the EXIT of Mr. Bernanke and the changing of the GUARD, something to do with it?. Are we heading for another recession.~ I am young enough to wait and see.

Dec 03, 2013 9:27am EST  --  Report as abuse
Afrodo wrote:
If the Foreign speculators-investors are holding off today in buying the $US dollar and its financial assets, will, the bears’ shorts’ covering be able to push the DOW into positive territory? If it doesn’t happen, Buying-Low-Sell-Lower could become the new paradigm, for awhile.

Dec 03, 2013 10:13am EST  --  Report as abuse
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