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 Oil prices rebounded sharply after hitting five-year lows, lifted by
data suggesting that tumbling prices may have started affecting
drilling activity in the fast-growing U.S. shale oil industry. Gold
posted its biggest daily gain in more than a year.
On Wall Street, the S&P 500 suffered its biggest one-day drop in
more than a month. Apple <AAPL.O> was the biggest drag on the S&P
500 and the most actively traded on Nasdaq. Apple ended down 3.2
percent after dropping as much as 6 percent. The cause of the
decline was not clear, though traders pointed to high-speed
algorithmic trading programs as a potential culprit.
Shares of U.S. retailers fell, after Thanksgiving weekend in-store
sales failed to impress. The S&P 500 retail index <.SPXRT> lost 1.5
percent.
The day's data added to investor caution. Chinese purchasing
managers data showed manufacturing slowed in November, suggesting
the world's second biggest economy was continuing to lose momentum.
Factory activity also slowed in France and Germany.
In the United States, growth in the manufacturing sector slowed for
a third straight month in November.
"We're watching growth struggle, especially outside the United
States," said Mark Martiak, senior wealth strategist at Premier
Wealth/First Allied Securities in New York. "Investors may be overly
complacent."
The U.S. dollar rose to its highest level against the yen since July
2007, hitting 119.15 yen <JPY=EBS> on the EBS trading platform,
immediately after Moody's lowered its rating on Japan, the world's
third biggest economy, by a notch to A1 from AA3, citing fiscal
problems. The dollar ran into profit-taking and was last down 0.3
percent at 118.29 yen.
The Dow Jones industrial average <.DJI> fell 51.44 points, or 0.29
percent, to 17,776.8, the S&P 500 <.SPX> lost 14.12 points, or 0.68
percent, to 2,053.44, and the Nasdaq Composite <.IXIC> dropped 64.28
points, or 1.34 percent, to 4,727.35.
MSCI's global share index <.MIWD00000PUS> was down 0.7 percent.
European shares <.FTEU3> ended down 0.5 percent. Emerging market
shares tracked by MSCI <.MSCIEF> fell 1.8 percent.
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World oil prices are down roughly 40 percent since June, largely on
abundant supply. OPEC last week declined to cut production to raise
prices. But with data suggesting that lower prices may have started
to affect drilling activity in the U.S. shale oil industry, there
are signs supply could fall.
Brent crude <LCOc1> fell as low as $67.53 a barrel, its lowest level
since October 2009, before reversing course to settle at $72.54, up
$2.39. U.S. crude oil <CLc1> rose $2.85 to settle at $69.00.
In the precious metals market, spot gold <XAU=> was up 4.2 percent
at $1,216.34.
U.S. Treasuries ended a six-session rally, falling on profit-taking
with investors anxious ahead of Friday's monthly U.S. employment
report. The benchmark 10-year Treasury note <US10YT=RR> was last off
6/32 in price and yielding 2.2165 percent versus 2.196 percent on
Friday.
"We have had a pretty good run-up," said David Coard, head of
fixed-income trading at Williams Capital Group in New York. "That
often results in people taking profits, or they might think
Treasuries are a little rich and may be selling short."
(Additional reporting by Ryan Vlastelica and Michael Connor in New
York; Editing by Leslie Adler)
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