By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks lost ground on Monday,
with two benchmark indexes retreating from record highs, after a
closely watched manufacturing gauge unexpectedly declined in
March.
The Institute for Supply Management's factory index fell to
51.3% in March from 54.2% in February. Economists polled by
MarketWatch had forecast the ISM to match February's level of
54.2%. Any figure over 50% signals expansion.
Separately, Markit's reading of U.S. manufacturing in March came
in at 54.6%, less than the 55% level analysts had expected.
Another report had construction spending climbing in
February.
"The ISM number is a little bit of a disappointment.
Construction is still good. Don't fight the Fed on the construction
front: they want to prop up the builder and that part of the
economy," said Nick Raich, chief executive officer at the Earnings
Scout.
"Right now, it seems people are waiting more for employment
numbers and earnings season," he added. The Labor Department will
release its March report on nonfarm payrolls and the unemployment
rate on Friday.
After rising as much as 27 points and falling as much as 47
points, the Dow Jones Industrial Average (DJI) was lately down
31.45 points, or 0.2%, to 14,547.09.
Two thirds of its 30 components were in the red, led by Intel
Corp. (INTC), down 2.2%, and Hewlett-Packard Co. (HPQ) , off
1.9%.
The S&P 500 index (SPX) fell 9.47 points, or 0.6%, to
1,559.70, with mining-equipment maker Joy Global Inc. (JOY)
declining 3.4% as industrials and materials were hardest hit among
its 10 major sectors.
After ending March at an all-time high, and recording its best
quarterly rise in a year, the S&P 500 remains under its
intraday high of 1,576.09.
The Nasdaq Composite (RIXF) lost 34.03 points, or 1%, to
3,232.89.
Decliners outpaced advancers by a more-than 2-to-1 ratio on the
New York Stock Exchange, where almost 382 million shares traded as
of 3:35 p.m. Eastern. Composite volume approached 2.2 billion.
The Chicago Board Options Exchange Volatility Index (VIX), which
gauges the price of employing options as a hedge against losses in
the S&P 500, leapt 9.2% to 13.87.
In corporate news, Dell Inc. (DELL) warned that it would be
risky to take on a significant amount of debt and remain a public
company given its darkening profit forecast. The comments made
Friday, a holiday for Wall Street, were seen as signaling the
computer maker considers bids from Blackstone Group LP and
billionaire investor Carl Icahn as potentially dangerous. Dell
shares fell 0.2%.
Telsa Motors Inc. (TSLA) jumped almost 14% after the
electric-car maker projected a profitable first quarter, pointing
to robust sales of its Model S sedan.
EBay Inc.(EBAY) climbed 3.8% after Canaccord Genuity Corp.
upgraded shares of the online auctioneer to a buy rating and J.P.
Morgan raised its price target to $64.
General Mills Inc. (GIS) declined 1.3% after Morgan Stanley
downgraded the food manufacturer to equalweight from
overweight.
In a piece for the New York Times on Sunday, David Stockman,
ex-budget director for President Ronald Reagan, said a market crash
is just a few years away. The piece drew its share of detractors,
including Princeton University economist and New York Times
columnist Paul Krugman.
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