Mitchell Jaworski - AHN Reporter
New York, NY (AHN) - Weakness in foreign markets and some soft economic data sent U.S. markets lower Monday following a strong week of gains. All three major indices fell more than 7 percent on the day.
The markets opened the session lower and selling only intensified after news hit that the National Bureau of Economic Research said the U.S. economy fell into recession back in December 2007. Based on that data, we are currently in the third-longest recession since the Great Depression.
The Dow Jones Industrial average fell 680 points or 7.7 percent, giving back nearly half of last week's gains. All 30 Dow components finished Monday lower by more than 5 percent.
Bank of America and JP Morgan weighed most on the Dow, falling 20.9 percent and 17.5 percent, respectively. The financial sector on a whole was weak, shedding 17 percent on Monday.
The S&P 500 fell 80 points or 8.9 percent. Only two of the 500 S&P components finished the day with a gain as selling was broad-based.
Retail stocks were off 9.3 percent despite better than expected sales reports for Black Friday. Investors may be concerned that margins were sacrificed in an effort to spark overall sales.
Tech was the weakest as the Nasdaq Composite fell 138 points or nearly 9 percent. Shares of Google led the way, down 9.2 percent.
In corporate news, Pilgrim's Pride filed for Chapter 11 bankruptcy protection. The Texas-based chicken processor said it will continue normal operations while it organizes a restructuring.
On the economic front, October construction spending fell 1.2 percent, slightly worse than the 1 percent decline expected.
The November ISM index showed the largest drop in U.S. manufacturing since 1982. The ISM index fell to 36.2 from 38.9 in October and was below estimates of 37.
Tuesday's session will see the release of November auto sales along with quarterly earnings reports from Staples and Sears Holdings.
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