US close: Dow and S&P 500 retreat from three-month high

(Sharecast News) - US stock markets inched lower on Monday, pulling back after the Dow and S&P 500 both closed at their highest levels in three months the previous session. The Dow Jones Industrial Average and S&P 500 finished 0.2% lower, while the Nasdaq fell 0.1%. On a shortened post-Thanksgiving trading session on Friday, the Dow and S&P 500 closed at their highest levels since 7 August and 1 August, respectively.

"After weeks of gains, it is not surprising to see stocks catch their breath in afternoon trading," said Chris Beauchamp, analyst at IG. "Things are quiet out there, perhaps a little too quiet, and more than a few investors will be casting a nervous eye on the Vix, which has reached its lowest level since January 2020."

Weighing on sentiment was government data in China which revealed that industrial profit growth slowed to just 2.7% in October, down from 11.9% in September and 17.2% in August.

"Renewed worries about the outlook for the Chinese economy caused tremors across global markets at the start of the new trading week. There was a slowdown in China's industrial profit growth during October, causing markets to speculate its government will have to come up with yet another stimulus measure to avoid the economy spluttering," says Russ Mould, investment director at AJ Bell.

On the macro front, new home sales fell 5.6% to 679,000 in October, according to the Census Bureau, well below forecasts for a print of 723,000, as mortgage rates hit their highest level in twenty years, weighing on buyers' affordability. The drop follows a downwardly revised reading of 719,000 in September. The median price of new houses sold was $409,300, while the average sales price was $487,000 - compared to $496,800 and $543,300 a year ago, respectively.

Elsewhere, the Dallas Federal Reserve's general business activity index for manufacturing deteriorated for the third straight month in November, reaching -19.9, its lowest since July. The production index moved into negative territory, falling to -7.2 in November, from +5.2 in the prior month, while the new orders index, which has been negative for 18 months, dropped to -20.5 in November, down from -8.8. The capacity utilisation index returned to negative territory, falling from 5.4 to -10.1, while the shipments index slipped eight points to -9.5.

Retailers gain on Cyber Monday

Black Friday e-commerce spending shot up 7.5% year-on-year to a record $9.8bn, sending shares in retailers higher on Cyber Monday after Friday marked the beginning of the all-important holiday shopping season. Amazon, Walmart, Lowe's and Home Depot were all in positive territory by the close. Shopify shares also surged, finishing the day 5% higher.

Amazon shares were also up after it was revealed that Jeff Bezos hadn't sold any stock in recent days - contrary to reports that the billionaire founder was planning to offload a sizeable stake.

Telecoms group Crown Castle International closed firmly higher after activist investor Elliott Investment Management called for a "comprehensive" boardroom shake-up.

Banks were mostly lower with Bank of America, JP Morgan Chase & Co, Citigroup and Morgan Stanley all in the red.