Stocks sink after retail sales slip, China slows

NEW YORK — Signs of weakness in China's economy and a weak start to the holiday shopping season knocked the stock market lower on Monday.

KEEPING SCORE: The Standard & Poor's 500 index fell 13 points, or 0.7 percent, to 2,055 as of 10:05 a.m. Eastern time. The Dow Jones industrial average fell 81 points, or 0.5 percent, to 17,745, while the Nasdaq composite fell 40 points, or 0.8 percent, to 4,751.

HOLIDAY SHOPPING: Earlier sales, more online shopping and a mixed economy meant fewer Americans showed up to shop over Thanksgiving weekend, the National Retail Federation said Sunday. The trade group estimated that total spending for the weekend was $50.9 billion, down 11 percent from last year.

REACTION: Major retail stocks slumped. Macy's lost $1.66, or 3 percent, to $63.25, and Target fell $1.69, or 2 percent, to $72.29. Best Buy lost $1.75, or 4 percent, to $37.65.

PAST PRECEDENT: December has proven to be the stock market's best month, on average. The S&P 500 has typically ended the month with a gain of 1.7 percent since 1950, according to the "Stock Trader's Almanac." The market does look relatively expensive, however. The S&P 500 index is trading at 17.6 times its profits over the past year, well above the long-term average.

OIL: U.S. benchmark crude edged up $1.22 to $67.38 a barrel after hitting a five-year low earlier Monday. It sank more than 10 percent Friday. The recent slide helped push Russia's currency, the ruble, down nearly 5 percent against the dollar. Russia's economy depends on oil revenue.

EUROPE: Germany's DAX shed 0.1 percent and France's CAC 40 dropped 0.2 percent. Britain's FTSE 100 shed 0.8 percent. Russia's RTS index fell 2.5 percent.

CHINA FACTORIES: A survey by HSBC showed Chinese manufacturing activity weakened in November, adding to signs an economic slowdown is deepening. HSBC said its purchasing managers' index declined to 50 from the previous month's 50.4. On the index's 100-point scale, numbers below 50 show indicate contraction. The bank said domestic demand was sluggish and new orders were weak. China's economic growth slowed to a five-year low of 7.3 percent in the latest quarter.

QUOTE: "The November PMIs confirm that growth in China's industry remains under downward pressure," Louis Kuijs of Royal Bank of Scotland wrote in a report to investors. "The surprisingly meager development of the new export order component in today's PMI indices suggests that global demand growth also remains subdued."

ASIA'S DAY: Hong Kong's Hang Seng index plunged 2.6 percent. China's Shanghai Composite Index shed 0.1 percent while Tokyo's Nikkei 225 added 0.8 percent. In South Korea, Seoul's Kospi declined 0.8 percent.

SAFE SPOTS: Prices for U.S. government bonds held steady. The yield on the 10-year Treasury note hovered near its low for the year at 2.16 percent, unchanged from late Friday. High demand for bonds pushes yields down. The dollar fell to 118.51 yen from Friday's 118.61 yen. The euro rose to $1.2460 from $1.2448.

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McDonald reported from Beijing.

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