Stocks retreated Monday in a wobbly session as investors returning from the long holiday weekend sorted through the fallout of the Dubai news and the weekend retail sales numbers.
Industrials and Home Depot were the biggest drags on the Dow. Telecoms were also weak.
Offering stocks a brief reprieve, a report showed business activity in the Midwest expanded at its strongest pace in more than a year.
This came after stocks tumbled 1.5 percent on Friday as worries about a possible debt default by Dubai rippled through global markets. But stocks had gained earlier in the week, and so ended the holiday-shortened week flat.
Stocks in Dubai fell more than 7 percent today, the first trading day since the emirate's request to delay debt repayments. But shares in Asia and in Europe, hit last week by the Dubai worries, jumped on the United Arab Emirates' central bank's decision to provide move to provide additional liquidity to commercial banks if needed.
The Institute for Supply Management-Chicago reported its gauge of regional business activity rose to 56.1 in November from 54.2 in October, the strongest reading since August 2008.
Banks were strong out of the gate today — with Dow financial components Bank of America , JPMorgan and American Express all up sharply — as U.S. banks had little exposure to Dubai's debt. European banks were among the most heavily exposed.
Industrials were some of the early decliners — with United Technologies, Boeing and DuPont at the bottom of the Dow pack — after UBS downgraded the sector to "underweight" from "neutral," saying demand remained weak.
Steel stocks got a boost after Goldman Sachs upgraded the sector to "attractive" from "neutral," saying prices have hit bottom, demand from China is strong and the weak dollar is helping. The brokerage also raised its price target on U.S. Steel to $54 from $49.
Some early numbers on Black Friday weekend here in the U.S.: The National Retail Federation said there were more shoppers this year but they spent less, on average — $343.31 this weekend, compared to $372.57 on the same weekend a year ago.
Shoppers may have been spending less at the malls, but they were spending more than ever at the movie box office. Total movie ticket sales for the holiday weekend hit a record $278 million, breaking the record set in 2000. The latest installment of "Twilight" led the box office surge.
Department stores were the surprise winners this weekend, drawing more traffic than discount chains, as shoppers opted to take advantage of the big sales to stock up on clothing and other items for themselves that they'd put off during the recession.
Retailers will be in focus once again today, on the day marketers dub "Cyber Monday," an antiquated term referring to when shoppers got back to the office — and their high-speed Internet connections. Despite all the hype, it has never been one of the biggest online shopping days of the season. Those days are typically in the weeks leading up to Christmas — the final days that retailers guarantee delivery by Christmas.
There is, however, typically an uptick in online shopping on this day, but this year may be different: Analysts say many employees are abstaining from online shopping at work this year, for fear of losing their jobs.
Most retail stocks were lower but Amazon , eBay and Best Buy advanced. Amazon shares hit an all-time high at $135.01.
Abercrombie and Fitch also gained after FBR raised its rating on the stock to "outperform" from "market perform."
One of the more notable stories was the weak debut of Sands China, the Macau unit of Las Vegas Sands, falling sharply in its initial session in Hong Kong.
On Tap for Next Week:
MONDAY: Senate begins health-care debate; Dallas, Chicago Fed manufacturing outlooks
TUESDAY: Auto sales; pending-home sales; ISM manufacturing; construction spending; Fed's Plosser speaks; Obama speaks; Earnings from Staples
WEDNESDAY: Weekly mortgage applications; weekly crude inventories; Challenger, ADP jobs reports; Fed's Lacker speaks; Fed's beige book; Earnings from Aeropostale
THURSDAY: Chain-store sales; weekly jobless claims; ECB, UK rate meetings; Bernanke renomination hearing; ISM services index; Earnings from Toll Brothers, Marvell Tech and Novell
FRIDAY: November jobs report; Fed's Plosser, Bullard speak; factory orders; Earnings from Big Lots
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