US close: Stocks decline after worse-than-forecast data
US stocks closed lower on Monday after investors were left disappointed by worse-than-expected economic data and the China government's lack of concrete stimulus plans at the G20 meetings.
The Dow Jones Industrial Average fell 0.74%, the Nasdaq dropped 0.71% and the S&P 500 dipped 0.82%.
An index measuring US pending home sales fell 2.5% month-on-month in January to a seasonally adjusted reading of 106 in January, the National Association of Realtors revealed. The drop was much worse than the 0.6% decline expected by analysts and reflected lower inventory and rising prices.
The Chicago Purchasing Managers’ Index fell 8 points to 47.6 in February following a sharp increase to 55.6 the previous month. The data, released by the Institute for Supply Management, missed economists’ expectations for a reading of 53, led by significant declines in production and new orders. A reading below 50 signals a contraction in sector activity while a level above that indicates an expansion.
Meanwhile, investors had been hoping China’s government would announce further stimulus measures to boost the economy over the weekend at the G20 in Shanghai after People’s Bank of China chief Zhou Xiaochuan said on Friday there was more room for easing. However, such an announcement failed to materialise, sending Asian stocks into the red.
The PBoC guided the yuan lower for fifth straight session on Monday, adding to worries that China is using the manipulation of its currency as a major tool to support the economy.
China’s central bank also announced on Monday that it was cutting the reserve-ratio for banks by 0.5 percentage points.
The ratio refers to the amount of cash China's lenders must keep as reserves.
“The People’s Bank paused monetary loosening in recent weeks apparently on concerns that it would worsen capital outflows,” according to Capital Economics.
“The government stepped up fiscal support instead. Today’s cut to the required reserve ratio (RRR) is therefore both confirmation that policymakers retain a bias towards easing and also a signal that they are less concerned about outflows getting out of control.”
In positive news, oil prices rallied as Saudi Arabia said it would work with other producers to limit oil market volatility. West Texas Intermediate crude rose 3.1% to $33.86 per barrel and Brent grew 2.4% to $35.97 per barrel at 2136 GMT.
"The kingdom (of Saudi Arabia) seeks to achieve stability in the oil markets and will always remain in contact with all main producers in an attempt to limit volatility and it welcomes any cooperative action," the Saudi cabinet said in a statement.
Saudi Arabia and several fellow OPEC members agreed with non-OPEC Russia this month to freeze output at January levels but Iran has remained the main obstacle at curbing an oversupplied market as it takes advantage of the recent lifting of its international economic sanctions.
Among corporate stocks, shares in Lumber Liquidators Holdings slumped after the flooring retailer a fourth quarter loss than was steeper than expected by analysts.
Signet Jewelers Limited advanced after the company reported preliminary fourth-quarter earnings that surpassed projections.
Valeant Pharmaceuticals International plunged after the drugmaker withdrew its earnings guidance and said it would reschedule its planned call to discuss fourth-quarter results, which had been due to be held on Monday.
The dollar fell 0.29% against the pound and dropped 1.07% against the yen but increased 0.50% versus the euro.
S&P 500 - Risers
Peabody Energy Corp. (BTU) $2.44 +10.41%
CONSOL Energy Inc. (CNX) $8.63 +10.08%
United States Steel Corp. (X) $9.12 +9.75%
Signet Jewelers Ltd (SIG) $108.40 +9.35%
Newfield Exploration Co (NFX) $27.23 +4.61%
CF Industries Holdings Inc. (CF) $36.46 +4.32%
ONEOK Inc. (OKE) $24.00 +4.30%
Rowan Companies plc (RDC) $13.32 +4.06%
Qorvo, Inc. (QRVO) $45.08 +3.73%
Ensco Plc. (ESV) $8.67 +3.09%
S&P 500 - Fallers
Endo International Plc (ENDP) $41.81 -21.02%
Southwestern Energy Co. (SWN) $5.78 -9.40%
Mylan Inc. (MYL) $45.07 -4.39%
Eog Resources Inc. (EOG) $64.74 -4.09%
Monster Beverage Corp (MNST) $125.50 -4.04%
SunTrust Banks Inc. (STI) $33.18 -3.94%
Red Hat Inc. (RHT) $65.35 -3.87%
Amgen Inc. (AMGN) $142.28 -3.60%
Ecolab Inc. (ECL) $102.55 -3.51%
M&T Bank Corp. (MTB) $102.55 -3.48%
Dow Jones I.A - Risers
Caterpillar Inc. (CAT) $67.70 +1.24%
American Express Co. (AXP) $55.58 +0.36%
Walt Disney Co. (DIS) $95.52 +0.22%
McDonald's Corp. (MCD) $117.19 +0.11%
Boeing Co. (BA) $118.18 +0.02%
Dow Jones I.A - Fallers
JP Morgan Chase & Co. (JPM) $56.30 -2.16%
Exxon Mobil Corp. (XOM) $80.15 -1.96%
Pfizer Inc. (PFE) $29.67 -1.85%
Unitedhealth Group Inc. (UNH) $119.10 -1.84%
Home Depot Inc. (HD) $124.12 -1.69%
Nike Inc. (NKE) $61.59 -1.61%
United Technologies Corp. (UTX) $96.62 -1.10%
Chevron Corp. (CVX) $83.44 -1.08%
E.I. du Pont de Nemours and Co. (DD) $60.87 -1.04%
Procter & Gamble Co. (PG) $80.29 -1.00%
Nasdaq 100 - Risers
Skyworks Solutions Inc. (SWKS) $66.44 +2.37%
Biomarin Pharmaceutical Inc. (BMRN) $81.87 +2.16%
Viacom Inc. Class B (VIAB) $36.85 +1.71%
Yahoo! Inc. (YHOO) $31.79 +1.34%
JD.com, Inc. (JD) $25.71 +1.18%
Autodesk Inc. (ADSK) $51.77 +1.13%
Intuit Inc. (INTU) $96.64 +0.93%
Dish Network Corp. (DISH) $47.13 +0.92%
Priceline Group Inc (PCLN) $1,265.81 +0.92%
Tesla Motors Inc (TSLA) $191.93 +0.84%
Nasdaq 100 - Fallers
Endo International Plc (ENDP) $41.81 -21.02%
Mylan Inc. (MYL) $45.07 -4.39%
Monster Beverage Corp (MNST) $125.50 -4.04%
Amgen Inc. (AMGN) $142.28 -3.60%
Illumina Inc. (ILMN) $150.24 -3.26%
Vimpelcom Ltd Ads (VIP) $3.54 -2.75%
Regeneron Pharmaceuticals Inc. (REGN) $384.02 -2.59%
Celgene Corp. (CELG) $100.83 -2.46%
Xilinx Inc. (XLNX) $47.22 -2.42%
Fiserv Inc. (FISV) $95.63 -2.40%