U.S. stocks were lower on Monday as weak Chinese economic data exacerbated concerns about a global slowdown and oil prices resumed their slide.
The data from China showed that the world's second-largest economy's manufacturing sector contracted in January at the fastest pace since 2012.
Oil prices fell about 6 percent after the China data added to worries about demand and an OPEC source played down talk of an emergency meeting to stem the decline. Oil prices have fallen more than 70 percent since mid-2014. [O/R]
Adding to the cautious note, data on Monday showed that U.S. consumer spending was unchanged in December and manufacturing activity continued to contract in January.
"The consumer spending numbers are a concern," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
"We keep hearing that there is pent-up consumer demand that we are going to see down the line but we've seen little evidence of that."
Consumer spending accounts for more than two-thirds of U.S. economic activity and is seen as a bright spot in an economy affected by weak export growth and unsold merchandise.
The reports follow a weak reading of the GDP, which showed that the U.S. economy expanded at an anemic rate in the fourth quarter.
Investors will keep an eye on the monthly employment numbers later this week to gauge the strength of the labor market.
At 12:32 p.m. ET (1733 GMT) the Dow Jones industrial average was down 96.39 points, or 0.59 percent, at 16,369.91, the S&P 500 was down 10.87 points, or 0.56 percent, at 1,929.37 and the Nasdaq Composite index was down 21.52 points, or 0.47 percent, at 4,592.43.
Eight of the 10 major S&P sectors were lower, with the energy index's 3 percent fall leading the decliners. Oil majors Exxon and Chevron were down about 2.5 percent.
Slammed by collapsing oil prices, stocks have had a volatile start to the year with traders expecting the Fed to scale back the number of rate hikes this year.
Coming off the worst January since 2009, the S&P 500 is already down more than 5 percent for the year. Traders are pricing in only a 17 percent chance that the Fed will raise rates in March, according to CME Group's FedWatch.
Investors will pay close attention to Fed vice-chairman Stanley Fischer's speech on monetary policy at 1 p.m. ET.
Fourth-quarter corporate reporting season is well under way, with S&P 500 companies on average expected to post a 4.1 percent drop in earnings, according to Thomson Reuters I/B/E/S.
Internet giant Alphabet, which reports after the close, was up 0.5 percent at $765.48. Toy maker Mattel will also report after the close.
Alere jumped 45.2 percent to $54 after Abbott Laboratories agreed to buy the diagnostics company for $5.8 billion. Abbott was little changed at $37.82.
Chipotle Mexican Grill was up 5.1 percent at $476.11 after E. coli outbreaks that affected the burrito chain's customers last year appeared to be over.
Twitter was up 8.5 percent at $18.23 after rumors of a private equity deal.
Yahoo was down 1.4 percent at $29.11 after the WSJ reported the company is set to reveal cost-cutting plans that include a reduction of 15 percent of its workforce.
Declining issues outnumbered advancing ones on the NYSE by 1,953 to 1,043. On the Nasdaq, 1,712 issues fell and 1,000 advanced.
The S&P 500 index showed 20 new 52-week highs and four new lows, while the Nasdaq recorded 19 new highs and 79 new lows.
(Reporting by Tanya Agrawal; Editing by Don Sebastian)
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Published Date: Feb 01, 2016 23:45 PM | Updated Date: Feb 01, 2016 23:45 PM