Stocks retreated Monday as a late afternoon selloff knocked the main U.S. indices out of a sideways range they had been traveling much of the day. The S&P 500 fell 0.6% and the NASDAQ 1.0% as the stock of Apple (AAPL) - which fell 2.6% - weighed heavily on the latter index. This is of course a blessing on the way up (Apple is up nearly 70% for the year) and a curse on the way down.
Meanwhile Intel (INTC), which had warned on guidance late last week, weighed on both the NASDAQ and Dow
The only economic report for the day in the U.S. was consumer credit, which showed the first decline in nearly a year, and the second straight month of credit card usage dropping. This can of course be viewed one of two ways - decreased credit usage can be a sign (a) that people are less confident about the future and hence will be reluctant to charge for items/services or (b) it can be a sign there is less desperation among those who have been using credit rather than cash to get by.
- Americans cut back on their credit card use in July for the second straight month. Total borrowing dipped $3.3 billion in July from June to a seasonally adjusted $2.705 trillion.
There was also a series of weak data out of China overnight, although that did not seem to impact markets much in the morning. Auto sales growth slowed in August and imports shrank unexpectedly. Factory output also slid to three year low.
Looking at the major U.S. indices the S&P 500 pulled back into the range it reached Thursday; if it can hold the top 1/3rd or 1/2th of that day's move it would be much more constructive than giving more of that back.
Meanwhile the NASDAQ was much weaker giving back the majority of Thursday's move.
Again standing out for its relative strength was the more "risk on" Russell 2000.
Looking ahead this week keep an eye on Wednesday premarket when Germany weighs the constitutionality of the Euro rescue fund, and of course the Federal Reserve announcement and press conference Friday. A key retail sales figure will hit Friday.
Finally, in a sign of the times, new JCPenney CEO Ron Johnson - who came over from Apple - had such success offering free haircuts to kids during a promotion, it will now be a full time special every Sunday starting in November!