NEW YORK - Stocks edged lower on Monday, extending a sluggish start to 2014, as traders assessed a disappointing slowdown in service industry growth in the U.S.
The stock market is getting the year off to a poor start after climbing almost 30 percent in 2013 and ending the year at record levels.
The S&P 500 has fallen 1.2 percent
in January and is on track to fall for the first three trading days of 2014. If
the index ends lower on Monday would be the worst start to a year since 2005.
The index climbed just 3 percent for that the whole year.
The declines have been led by the
technology and utilities sectors. Each group is down 1.8 percent. Banks,
insurers and other financial companies make up the only sector in the S&P
500 that has advanced this year, gaining 0.3 percent.
The Standard & Poor's 500 fell two
points, or 0.3 percent, to 1,825 as of 2:24 p.m. ET. The Dow Jones industrial
average dropped eight points, or 0.1 percent, to 16,461. The Nasdaq composite
fell 14 points, or 0.4 percent, to 4,117.
The minutes from the Federal Open
Market Committee will be released on Wednesday. They will offer insight into
the Fed's thinking after it said it would begin 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 decisions on how fast to reduce its bond
purchases in the coming months.
Alcoa, a former Dow stock, will be one
of the first major companies to report its fourth quarter earnings after the
close of the market on Thursday.
Despite the slow start to the year,
many analysts still say it's too early to call a change in the market's upward
"This downturn is persisting a
little bit more than I would expect," said Jack Ablin, chief investment
officer at BMO Private Bank. "Between the jobs report Friday and earnings
results next week, we will have a much better idea of the drivers of the market."
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
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.
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 $2.34, or 4.3 percent, to $56.75. Men's
Wearhouse climbed $1.35 cents, or 2.7 percent, to $51.94.
Sirius XM rose 24 cents, or 6.6
percent, to $3.81 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.
The electronics retailer Best Buy, one
of best performers in the S&P 500 last year, is having a tough start to the
year. The retailer's stock slipped $1.65, or 4 percent, to $39.03 on Monday,
after Hhgregg, one of its smaller competitors, forecast disappointing sales for
the holiday season.
PetSmart fell $1.80, or 2.5 percent,
to $70 after analysts at Deutsche Bank advised their clients to sell the
company's stock, predicting the pet retailer will struggle as it faces
The yield on the 10-year Treasury note fell to 2.96 percent from 3 percent on Friday. The price of oil fell 50 cents, or 0.6 percent, to $93.44 a barrel. Gold was little changed from Friday at $1,238 an ounce.