Nasdaq Composite defied the general trend and ends little higher
U.S. stocks ended lower on Monday, 08 September 2014 as investors turned cautious after five straight weeks of gains that sent the main benchmarks to record highs. A few M&A deals were grabbing attention on Monday. On the economic news front, data showed consumer credit rose a record amount in July.
The Dow Jones Industrial Average dropped 25.9 points, or 0.2%, to 17,111.42. The Nasdaq Composite defied the general trend and finished the session 9.4 points, or 0.2%, higher at 4,592.29. The S&P 500 lost 6.2 points, or 0.3%, to end at 2001.54.
Seven out of ten sectors ended with losses led by the energy sector.
Dow components Chevron and ExxonMobil posted respective losses of 0.9% and 1.5% as the stronger dollar and cheaper oil weighed on earnings prospects of the two multinational giants.
The technology sector outperformed throughout the session, which underpinned the Nasdaq. Top-weighted components like Google, Microsoft and Intel posted gains between 0.6% and 1.2%, while the top index member by weightApple lost 0.6%.
Energy notwithstanding, other sectors ended much closer to their flat lines. The consumer discretionary sector weighed amid weakness in the shares of Ford and General Motors after Morgan Stanley downgraded the U.S. auto sector.
Multimedia Games shares surged 30% after the electronic gaming company announced a $1.2 billion deal to be acquired by Global Cash Access Holdings Inc.
In other news Monday, China's trade surplus hit a record high in August, at $49.8 billion, and well above market expectations. China exports were reported up 9.2% in August, year-on-year, which is slightly better than expectations. Imports were down 2.4%. Falling raw commodity prices were a major contributor to China's trade surplus. China is the world's largest raw commodity importer.
Meantime, Japan's economy contracted by 7.1% in the second quarter, year-on-year, it was reported Monday. The past few years have seen Japan, which is still a top-five world economy, become less of a factor in world economic and markets matters.
Economic data was limited to the Consumer Credit report for July, which pointed to a $26.00 billion increase from an upwardly revised $18.80 billion (from $17.30 billion) in June, while the consensus expected an increase of $17.40 billion.
On the geopolitical front, there were no major, markets-moving developments during the weekend.
A stronger dollar also contributed to the declines. The dollar was stronger versus the pound as the British currency stumbled after poll results showed pro Scotland-independence voters taking the lead for the first time since the referendum campaign started.
A strong dollar is detrimental to commodities, which are priced in dollars, since it makes them more expensive to holders of other currencies.
Bullion prices ended the U.S. day session down at Comex on Monday, 08 September 2014 and gold hit a three-month low on Monday. The market was pressured by selling pressure and the surging U.S. dollar index, which hit another 13-month high. Gold prices rolled over to close lower on Monday giving up earlier gains as headline risk from global conflicts eased.
Gold for December delivery closed at $1,254.30 an ounce, down 1% from $1,267.30 on Friday. December silver fell 20 cents, or 1%, to settle at $18.96 an ounce.
Crude oil prices ended lower at Nymex on Monday, 08 September 2014. Prices settled barely above the psychologically important $100-a-barrel mark, their lowest in more than a year, after macroeconomic data out of Asia spurred demand concerns and a stronger dollar kept commodities under pressure. Chinese import data were poor and the Japanese economy contracted an annualized 7.1% in the second quarter, slightly more than expected.
Light, sweet crude futures for delivery in October lost 63 cents, or 0.7%, to end at $92.66 a barrel on the New York Mercantile Exchange. That was the lowest settlement since January 14, and also a third straight loss.
Participation remained light with fewer than 590 million shares changing hands at the NYSE floor.
Tomorrow's data will be limited to the Job Openings and Labor Turnover Survey, which will be released at 10:00 ET.
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