Posted: Jan 6, 2014 10:45 AM
Updated: Jan 6, 2014 10:45 AM
NEW YORK (AP) Stocks fell on Monday, extending a sluggish start to 2014, as traders assessed a disappointing slowdown in service industry growth in the U.S.
KEEPING SCORE: The Standard & Poor's 500 fell six points, or 0.3 percent, to 1,825 as of 12:37 p.m. Eastern time. The Dow Jones industrial average dropped 53 points, or 0.3 percent, to 16,417. The Nasdaq composite fell 21 points, or 0.5 percent, to 4,110.
The stock market is getting the year off to a poor start. The S&P 500 fell for the first two days of the year for the first time since 2005 and is down 1.2 percent in the month so far. So far the tone is a big change from 2013, when the S&P 500 surged almost 30 percent.
THE ECONOMY: U.S. service companies grew at a steady but slightly slower pace in December. Sales dipped and new orders plunged to a four-year low, according to a report from the Institute for Supply Management. The report suggests that growth may remain modest in the coming months.
U.S. factory orders climbed in November, led by a surge in aircraft demand. Businesses stepped up spending on machinery, computers and other long-lasting goods. Factory orders rose 1.8 percent in November, the Commerce Department said Monday.
HOSTILE HABERDASHER: Men's Wearhouse is going hostile in its takeover bid for Jos. A. Bank Clothiers. A $1.61 billion bid announced early Monday comes four months after Jos. A. Bank made its own takeover bid for its larger rival. Men's Wearhouse rejected the offer and bid for Jos. A. Bank. After failing to reach a deal, Men's Wearhouse is going directly to Jos. A. Bank shareholders. Jos. A. Bank rose $2.55, or 4.7 percent, to $56.96. Men's Wearhouse climbed $1.51 cents, or 3 percent, to $52.10.
RADIO STAR: Sirius XM rose 23 cents, or 6.4 percent, to $3.80 after Liberty Media said late Friday that it wants to take full ownership of the satellite radio company in a deal that would value it at nearly $23 billion.
PET PEEVES: PetSmart fell $1.71, or 2.4 percent, to $70.08 after Deutsche Bank analysts advised their clients to sell the company's stock, predicting the pet retailer will struggle as it faces increased competition.
TREASURIES AND COMMODITIES: The yield on the 10-year Treasury note fell to 2.95 percent from 3 percent on Friday. The price of oil was flat at $93.95 a barrel. Gold was little changed from Friday at $1,240.80 an ounce.
KEEPING THE FAITH: Despite the sluggish start to the year, the market's trend higher should remain intact for January, said Randy Frederick, Managing Director of Active Trading & Derivatives at the Charles Schwab Center for Financial Research.
"I'm pretty optimistic for the month of January," said Frederick. "There just aren't a lot of catalysts out there to make the market go lower."
COMING UP THIS WEEK: The minutes from the Federal Open Market Committee will be released on Wednesday. They will offer insight into the Fed's thinking after it began winding down its monthly $85 billion bond-buying program. The highlight of the week will likely be Friday when the Labor Department releases its jobs report for December. That's going to influence the Fed's decision as to the pace at which it reduces its bond purchases in coming months.