Global stocks fall after new signs of slower growth; yen, oil rebound

Mon Dec 1, 2014 5:02pm EST
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By Caroline Valetkevitch

NEW YORK (Reuters) - Global stock markets fell on Monday as slowing factory activity in China and Europe added to worries about weaker global growth and Apple shares dropped, while the yen briefly hit a seven-year low after Moody's cut its rating on Japan.

Oil prices rebounded sharply after hitting five-year lows, lifted by data suggesting that tumbling prices may have started affecting drilling activity in the fast-growing U.S. shale oil industry.

On Wall Street, Apple (AAPL.O: Quote) shares were down 2.4 percent after dropping as much as 6 percent, and the stock was the most actively traded on Nasdaq. The cause of the decline was not yet clear, though traders pointed to high-speed algorithmic trading programs as a potential culprit. Shares of U.S. retailers declined after Thanksgiving weekend in-store sales failed to impress. The S&P 500 retail index .SPXRT was down 1 percent.

The day's data added to investor caution. Chinese purchasing managers (PMI) data showed manufacturing slowed in November, suggesting the world's second biggest economy was continuing to lose momentum. Factory activity also slowed in France and Germany.

"The places where we are seeing strength are in the more defensive areas of the (stock) market. That's tied to the perceived weakness in global growth," said Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey.

The U.S. dollar rose to its highest level against the yen since July 2007, hitting 119.15 yen JPY=EBS on the EBS trading platform, immediately after Moody's lowered its rating on the world's third biggest economy by a notch to A1 from AA3, citing Japan's fiscal problems. The dollar ran into profit-taking and was last trading at 118.20 yen, down 0.4 percent on the day.

The Dow Jones industrial average .DJI fell 18.28 points, or 0.1 percent, to 17,809.96, the S&P 500 .SPX lost 10.12 points, or 0.49 percent, to 2,057.44, and the Nasdaq Composite .IXIC dropped 48.65 points, or 1.02 percent, to 4,742.98.

MSCI's global share index .MIWD00000PUS was last down 0.5 percent. European shares .FTEU3 ended down 0.5 percent. Emerging market shares tracked by MSCI .MSCIEF fell 1.7 percent.   Continued...

A customer uses the nozzle of a petrol pump at a gas station near Prague August 23, 2012.  REUTERS/David W Cerny