Questions surrounding the strength of the Chinese economy, renewed concerns about European debt and lingering worries over the Federal Reserve’s decision to buy up $600 billion in debt weighed on markets Monday.
The Dow Jones Industrial Average had its worst day since August, slipping 178.47 points, or 1.6 percent, to 11,023.50 and spending much of the day under 11,000, a level it hadn’t surrendered since Oct. 27.
The S&P Retail Index, however, fared relatively better, falling 2.77 points, or 0.6 percent, to 470.53 as earnings reports from Wal-Mart Stores Inc., Saks Inc., The TJX Cos. Inc. and Abercrombie & Fitch Co. matched or exceeded Wall Street’s expectations.
Retail decliners included Nordstrom Inc., down 3.1 percent to $40.55; Tiffany & Co., 3 percent to $54.54, and Macy’s Inc., 2.2 percent to $24.15.
The SSE Composite Index in Shanghai contracted 4 percent to 2,894.54 and the Hang Seng Index in Hong Kong pulled back 1.4 percent to 23,693.02. European markets were shaken by amplified conversation about the possibility that Ireland would require a Greece-style bailout, contributing to a 2.7 percent pullback by the CAC 40 in Paris, to 3,762.47, and a 2.2 percent drop in London’s FTSE 100, to 5,690.80.
In the U.S., the Labor Department reported in its Producer Price Index that prices for all goods and services increased 0.4 percent in October, due primarily to surging oil-based energy prices. Energy prices were up 3.7 percent overall. Core producer prices, which exclude the volatile food and energy sectors, fell 0.6 percent, driven primarily by declining prices for new autos.
Wholesale prices for U.S.-made apparel increased 0.7 percent in October compared with September, and rose 0.2 percent against a year earlier. Women’s apparel prices were up a seasonally adjusted 0.3 percent month-to-month, but fell 0.1 percent compared with October 2009. Men’s domestic apparel prices rose 1.8 percent in October compared with the prior month, but dipped 0.1 percent year-over-year.
“There is upward pressure on input costs from rising commodity prices, which was clear in sharp rises in intermediate and crude material costs. It is not true to say that no cost increases are filtering through,” said Nigel Gault, chief U.S. economist for IHS Global Insight, adding that he expects core inflation to “remain quiet despite higher costs.”