US stocks fell on Monday, retreating after last week's big rally, as investors digested President elect Barack Obama's stimulus plan, monthly auto sales and surging oil prices. The DJIA closed 81.80 points lower at 8952.89, the Nasdaq lost 4.18 points to close at 1628.03 and the S&P500 closed 4.35 points lower at 927.45.
President-elect Obama was meeting Monday with leaders of both parties to start pushing for his economic stimulus plan. The plan will include $300bn in tax cuts for businesses and individuals, and provisions for renewable energy production and road and school construction. Also Monday, a House panel was holding a hearing on the Bernard Madoff scandal, which cost investors an estimated $50bn.
In economic news, November construction spending held up better than had been expected. Spending fell 0.6 percent versus forecasts for a drop of 1.4 percent. Spending fell 0.4 percent in the previous month.
During the session, automakers reported December sales results. Ford Motor said sales fell 32 percent in the month, a slightly narrower loss than what analysts had been expecting. General Motors said sales fell 31 percent in December, also slightly narrower than what analysts had forecast. Toyota reported that sales fell 37 percent in the month, while Chrysler reported sales fell 53 percent.
In company news, the MacWord conference for Apple developers got underway in San Francisco, with Apple expected to unveil new products. Ahead of the presentation, CEO Steve Jobs said his recent weight loss has been traced to a hormone imbalance for which he is being treated. Jobs said that he will stay in the job as he recovers.
Pfizer said it is open to buying rivals as a means of growing revenue, according to a FT report.
AT&T and Verizon Communications both slipped after Bernstein downgraded the two companies.
Treasury prices tumbled, raising the corresponding yields on the 10 year note to 2.49 percent from 2.37 percent.
Lending rates were mixed. The 3 month Libor rate rose to 1.42 percent from 1.41 percent, a 4 1/2 year low. Overnight Libor held steady at 0.12 percent.
The dollar gained versus the euro and the yen.
US light crude for February delivery rose $2.47 to settle at $48.81 a barrel on NYMEX.
COMEX gold for February delivery fell $21.70 to settle at $857.80 an ounce.
Gasoline prices rose 1.4 cents to a national average of $1.672 a gallon.
The Nikkei average rose to a two month closing today, buoyed by exporters such as Canon Inc on a weaker yen and hopes for economic stimulus steps by the US administration taking office later this month. Toyota Motor Corp gained despite a more than 30 percent plunge in its US auto sales for December. Hit by a sharp deterioration in global demand, the carmaker said it would halt production at all of its domestic plants for a total of 11 days in February and March. The Nikkei average closed 37.72 points higher at 9080.84, the highest close since November 10.
UK stocks rose on Monday, adding to the post Christmas rally, with Vodafone in demand, and oil stocks firmer, outweighing a fall in defensive pharmaceuticals and tobacco stocks. The FTSE100 closed 17.85 points higher at 4579.64, its highest close in two months. Vodafone rose 4.4 percent, extending its recent strong run to reach its highest since September after Credit Suisse marked the company as a "trading buy" on December 31.
Oil stocks were firmer as crude prices pushed back above $47 a barrel, lifted by concern about Israel's offensive in the Gaza Strip and the Russian gas supply row. BG Group, BP, Cairn Energy and Tullow Oil added between 1.3 and 4.1 percent. Markets shrugged off concerns about war in the Middle East as the prospect of tax cuts in Germany and a slightly better than forecast survey of euro zone investor sentiment eased anxiety.
Banks were mixed, with HBOS sliding 9.2 percent and Lloyds TSB falling 3.3 percent but Barclays added 2.6 percent and Standard Chartered rose 6.2 percent. Deutsche Bank said in a note that it had cut its 2009 EPS forecasts for Barclays, HSBC, RBS and Standard Chartered by 12 to 72 percent.
Retailers were mixed with a number of Christmas trading updates due this week. John Lewis set the tone announcing like for like sales excluding VAT at its department stores were flat for the five weeks to January 3, compared with the same period last year, with managing director Andy Street saying he expected the next few months to be "extremely tough". Marks and Spencer rallied 4.1 percent ahead of Wednesday's trading update, while Debenhams gained 11.8 percent ahead of its update due today. Next fell 1.6 percent, with its update expected also today, and Sainsbury was down 4.2 percent ahead of trading news on Thursday.