By Dan Strumpf And Saumya Vaishampayan
U.S. stocks edged lower Monday, pressured by further signs of
economic weakness in Europe and Japan.
The Dow Jones Industrial Average fell 19 points, or 0.1%, to
17940 in early trading. The S&P 500 index slipped two points,
or 0.1%, to 2073. The Nasdaq Composite Index gained six points, or
0.1%, to 4786.
The Dow was weighed by declines in shares of McDonald's Corp.,
which posted sharper-than-expected sales declines in November.
Shares of the fast-food operator fell 3.2%.
The losses come on the heels of declines in Europe, after data
showed German industrial output rose less than expected in October
and Japan's economy contracted 1.9% in the third quarter. The Stoxx
Europe 600 Index declined 0.4%.
"Europe is a little lower, and the market is still digesting
Friday's big day," said Doug Cote, chief market strategist at Voya
Asset Management, referring to Friday's better-than-expected U.S.
jobs report for November.
He added that stocks could turn higher by the end of the day,
noting that "crude oil is continuing to come down, and I think that
bodes well for the consumer." Crude-oil futures declined another
1.8% to $64.67 a barrel, weighed by a strengthening dollar.
The Japanese report is "another sign of general weakness out
there," said Colin Cieszynski, chief market strategist at CMC
Markets. "It shows that outside of North America, pretty much
everybody else is struggling."
Japan's economic contraction was previously estimated at 1.6%
for the third quarter, and the downward revision underscores that
the world's No. 3 economy is in a deeper recession than previously
thought.
Stocks rose to record highs Friday, propelling the Dow
industrials and the S&P 500 to their seventh straight week of
gains. The advance was spurred by the strong U.S. jobs report.
Many investors still see further gains for stocks in the next
year, buoyed by signs of economic improvement in the U.S. and
monetary easing efforts by central banks in Europe and Japan.
Economic news is light this week, with many investors focused on
the Federal Reserve's policy meeting that ends on Dec. 17 for
indications on the pace of interest-rate hikes, widely expected
sometime next year.
In China, exports in November grew by less than expected as
economic woes in the Japanese and European economies sapped demand
for Chinese goods. China's exports rose 4.7% in November from a
year ago. A Wall Street Journal survey of economists showed a
median growth forecast of 8%.
Gold futures rose 0.6% to $1197 an ounce. The yield on the
10-year Treasury note fell to 2.299% from 2.306% on Friday.
In corporate news, Merck & Co. agreed to buy Cubist
Pharmaceuticals Inc. for $8.4 billion. Shares of Merck slipped
0.3%, while those of Cubist surged 36%.
Shares of ConocoPhillips fell 2.2% after the oil company said it
expects its capital spending to decline 20% to $13.5 billion next
year from 2014 levels, reflecting lower spending on major projects
and deferred spending elsewhere amid the slide in oil prices.
American Airlines Group Inc. shares declined 0.7% after the
airline reduced its forecast for a key measure of revenue
generation in the fourth quarter.
Write to Dan Strumpf at daniel.strumpf@wsj.com and Saumya
Vaishampayan at saumya.vaishampayan@wsj.com
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