FOX Business: Capitalism Lives Here

Wall Street kicked off December in the loss column on disappointing U.S. manufacturing data and continued budget drama in Congress. All but one major sector ended in the red.

Today's Markets

The Dow Jones Industrial Average fell 60 points, or 0.46%, to 12966, the S&P 500 dipped 6.7 points, or 0.47%, to 1409 and the Nasdaq Composite declined 8 points, or 0.27%, to 3002. The FOX 50 slumped 4.9 points to 1042.

The markets are looking to post solid yearly gains with just a month to go before closing the year out. The S&P 500, considered one the best broad-market barometers, was up 12.1% year-to-date as of Monday's close.

On Monday, the only sector to eke out a gain was telecommunications. The biggest loser by a wide margin were materials and industrial stocks -- both seen as especially sensitive to economic fluctuations. 

Trader's said the looming fiscal cliff -- a powerful punch of spending cuts and tax hikes set to go into effect at the beginning of 2013 -- is expected to garner much attention. Indeed, the saga continued on Monday, with leading Republicans in Congress saying in a letter could not agree to President Obama's budget proposal, calling it 'neither balanced nor realistic.' The letter outlined reforms they see as necessary for averting the fiscal cliff.

However, this week, the spotlight may also be shared by several important economic reports, capped with the all-important monthly jobs report on Friday. 

Manufacturing in the Spotlight

The focus on the day was the global manufacturing sector. 

The Institute for Supply Management’s Manufacturing  Index declined to 49.5 in November from 51.7 in October, suggesting the U.S. manufacturing sector slipped into contraction territory. Economists expected a reading of 51.2, which would have indicated a slower rate of expansion.

China's manufacturing sector expanded for the first time in 13 months in November, according to a closely-eyed report from HSBC. Fears that the world's No. 2 economy could be in for a so-called hard landing in which growth cools rapidly have caused worries among some economists; although it appears accommodative monetary and fiscal policies out of Beijing may be helping to avoid that scenario. 

"This confirms that Chinese economy continues to recover gradually," Hongbin Qu, the bank's chief economist for China said in the report. He reckons the economy will grow at a pace of 8% in the fourth quarter as "as the easing measures continue to filter through." 

Meanwhile, the manufacturing sector in the embattled eurozone showed modest signs of recovery. It contracted at a slower pace in November than the month before. Despite the modest improvement, manufacturing still shrunk in the 17-member currency bloc's four biggest economies, Germany, France, Italy and Spain, highlighting the notion that the crisis is not limited to the periphery. Manufacturing in the U.K., which is part of the European Union but not the eurozone, also contracted at a much slower pace than in October, and came close to expansionary territory. 

Also on the European front, Spain made a formal request for rescue funds for its banking sector, according to a report from Reuters. The news service said disbursement is expected on December 12. Eurozone finance ministers were also meeting to finalize the terms of Greece's next bailout installment. 

In corporate news, Singapore Airlines revealed that it is interested in selling its 49% stake in British carrier Virgin Atlantic. Delta Air Lines (DAL) was mulling a takeover, according to multiple news reports, citing unnamed sources close to the matter. 

Commodities markets were mixed. The benchmark crude contract rose 18 cents, or 0.2%, to $89.09 a barrel. Wholesale New York Harbor gasoline dipped 0.14% to $2.727 a gallon. In metals, gold gained $8.40, or 0.49%, to $1,721 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 rose 0.25% to 2582, the English FTSE 100 edged up by 0.08% to 5871 and the German DAX climbed 0.4% to 7435. 

In Asia, the Japanese Nikkei 225 ticked up 0.13% to 9458 and the Chinese Hang Seng sold off by 1.2% to 21768.

 

Follow Adam Samson on Twitter @adamsamson.