- Stocks slumped to their worst showing in six weeks after U.S. factory activity contracted for a fourth straight month in November as new orders fell to near their lowest level since 2012, while construction spending fell in October.
- Combined with Pres. Trump's move to restore tariffs on steel imports from Brazil and Argentina, investor optimism about revival in global manufacturing sector was dimmed after a recent run of upbeat reports had pushed stocks to record highs.
- "We've seen world trade slowing down. The last thing we need is more tariffs to slow it down further," said Lucy MacDonald, chief investment officer for global equities at Allianz Global Investors.
- But consumer spending still looks to be in good shape, as Adobe Analytics estimated online sales would total $9.4B by the end of today after Black Friday online sales registered a record high $7.4B.
- As a result, the consumer staples (+0.3%) sector finished in positive territory, while energy (+0.1%) eked out a gain as January WTI crude oil settled +1.4% to $55.96/bbl.
- But the other nine S&P sectors closed lower, led by real estate (-1.8%), industrials (-1.6%) and information technology (-1.4%).
- Elsewhere, U.S. Treasury prices fell after the Financial Times reported that the Fed is considering a rule to allow inflation to exceed its 2% target; the two-year yield rose 2 bps to 1.84% and the 10-year yield added 6 bps to 1.84%.