Stocks: A down day in a strong month

Wall Street follows overseas markets lower as nervous investors brace for a choppy September. Disney, Marvel deal fails to improve the mood.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Ben Rooney, staff reporter

Fortune 40: The best stocks to retire on
After a bleak 2008, equities are looking up. But whatever the market, our trademark long-term portfolio can help you build a nest egg for a secure future.

NEW YORK ( -- Stocks closed lower Monday after a big drop in Chinese shares heightened concerns that U.S. markets have risen too far, too fast. But August was a good month for Wall Street.

The Dow Jones industrial average (INDU) shed 47 points, or 0.5%, on the last day of the month. The S&P 500 (SPX) index lost 8 points, or 0.8%, while the Nasdaq composite (COMP) slid 20 points, or 0.9%.

Despite Monday's weakness, the Dow and S&P turned in their best August performance since 2000. For the entire month, the Dow gained about 3.5% and the S&P added roughly 3.3%.

The Nasdaq rose 1.5% in August.

Stocks opened sharply lower Monday, following a 6% drop in the Shanghai Composite index. The selloff in China raised concerns about the global economy and prompted investors to shy away from risky assets.

Oil prices sank nearly 5%, falling below $70 a barrel. That dragged on shares of oil services firms Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500). Industrial names such as Boeing (BA, Fortune 500) and Caterpillar (CAT, Fortune 500) also fell sharply.

Bank stocks, which have led the market higher in recent sessions, came under pressure. Citigroup (C, Fortune 500) was down 4%, while Morgan Stanley (MS, Fortune 500) lost about 2%. Troubled insurance giant AIG (AIG, Fortune 500) fell nearly 12%.

The retreat came despite a pair of big corporate mergers and a stronger-than-expected regional manufacturing report. Analysts said the market's tone is jittery heading into what is expected to be a volatile month.

'September smack down.' September is historically the worst month for stocks and market participants are bracing for a possible pullback following a surprisingly strong summer advance.

Between the March 9 lows and Friday's close, the S&P 500 gained 52%, as investors responded to stronger corporate results and improved economic data. For the year, stocks, as measured by the S&P 500 index, are up nearly 13%.

However, analysts say more concrete signs of economic growth are now necessary to keep the rally going.

"As we head into September, the fundamentals this first week could set the tone for the entire month," said Dan Cook, senior market analyst at IG Markets. As money managers come back from vacation to an uncertain economic outlook, the market could be in for a "September smack down," he said.

Among the fundamental economic indicators due out this week: The ISM index of manufacturing activity and auto sales for August come out Tuesday. On Friday, the Labor Department's monthly employment report is expected to show a slight increase in the nation's unemployment rate.

Mergers and acquisitions: Walt Disney (DIS, Fortune 500) said it would acquire comic book publisher Marvel Entertainment (MVL) for approximately $4 billion. Shares of Marvel surged 25%.

In other deals, oilfield services company Baker Hughes (BHI, Fortune 500) said that it would purchase rival BJ Services (BJS, Fortune 500) in a cash-and-stock deal worth approximately $5.5 billion.

Economy: A report showed manufacturing activity in the Midwest was stronger than expected during August.

The Institute for Supply Management's Chicago PMI rose to 50 in August from 43.4 in July. Economists surveyed by had forecast a reading of 47.2.

The report comes one day before the ISM releases its national manufacturing report, which is forecast to rise to a level signaling expansion for the first time since January 2008.

Other markets: In currency trading, the dollar fell against the euro and retreated versus the yen.

Oil for October delivery was down $3.07 to settle at $69.68 a barrel in New York.

Bond prices rose, with the benchmark 10-year note gaining 9/32 to 101-23/32. Its yield, which moves inversely, was 3.41%.

How does your portfolio look nearly one year after the collapse of Lehman Brothers? What investment choices hurt you or helped you the most? What strategy changes are you making for the future? Tell us your story. E-mail and your thoughts could be part of an upcoming story. For the Comment Policy, click here. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.