Stocks Mixed After Weak Manufacturing Report
NEW YORK (AP) — Stocks were little changed on Wall Street Monday after a surprisingly weak manufacturing report heightened concern that fiscal deadlock in Washington is already hurting the economy.
The Dow Jones industrial average fell 11 points to 13,045 as of 11:58 a.m. Eastern. The Standard and Poor’s 500 was up one point at 1,417. The Nasdaq composite was up 6 points to 3,016.
U.S. manufacturing declined in November, the Institute for Supply Management reported. The ISM’s index fell to 49.5 from 51.7 a month earlier, below the 51.2 reading forecast by analysts. Any number below 50 on the scale means that manufacturing is contracting. Businesses expressed concerns about the “fiscal cliff,” a series of sharp government spending cuts and tax increases scheduled to start Jan. 1 unless an agreement is reached to cut the budget deficit.
“The ISM numbers probably took a little air out of what was some hope for better news on where the economy is going,” said Jim Dunigan, executive vice president at PNC Wealth Management in Philadelphia. “We’re still in the camp that this gets resolved and we don’t go over the cliff, but there’s a lot of angst between now and then.”
The White House and Congress are still seeking to hammer out a budget deal that will avoid the “cliff.” Republicans have balked at President Barack Obama’s opening proposal of $1.6 trillion in higher taxes over a decade, a possible extension of the temporary Social Security payroll tax cut and heightened presidential power to raise the national debt limit.
Stocks have fluctuated since the Nov. 6 election as investors worried that a deal may not be reached in time to avoid the tax hikes and spending cuts.
Wall Street opened higher Monday following news that manufacturing activity in China, the world’s second largest economy, grew for the first time in 13 months and after Greece announced details of a bond buyback program. The Dow had been up as much as 62 points shortly after the opening bell.
The yield on the 10-year Treasury note rose 2 basis points to 1.63 percent.
Other stocks making big moves:
—Dell rose 58 cents to $10.22 after Goldman Sachs raised its rating to “Buy” from “Sell.” Goldman cited Dell’s healthy cash balance and said a recent decline in the stock may have been overdone. Dell has slumped this year on concern that consumers are migrating away from desktop PCs and laptops to portable devices such as tablets and phones.
—Supervalu jumped 15 cents to $2.53 following a report that private equity firm Cerberus is considering multiple options for buying parts of the struggling grocery store chain.
—Ford rose 9 cents to $11.55 after the company said that U.S. vehicle sales rose 6.5 percent in November thanks to strong demand for its F-Series pickups and the company’s new C-Max hybrid.