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View the article online at http://citywire.co.uk/wealth-manager/article/a722439

Overnight Markets: Wall Street drops after retail reports

by Himanshu Singh on Dec 04, 2013 at 03:53

Overnight Markets: Wall Street drops after retail reports

US stocks declined for a third day on Tuesday, as investors took profits amid signs of a weak holiday shopping season.

The Dow Jones industrial average declined 94 points, or 0.59%, to end at 15,915. The Standard & Poor's 500 Index fell six points, or 0.32%, to finish at 1,795. The Nasdaq Composite Index dropped eight points, or 0.20%, to close at 4,037.

Investors speculated that the Federal Reserve may move to trim its stimulus earlier than some had anticipated in response to stronger-than-expected data on manufacturing and construction spending on Monday.

Retail and consumer discretionary stocks suffered the most. Amazon.com Inc (AMZN.O) slipped 2% and was one of the biggest drags on the S&P 500 even as online Cyber Monday sales surged to a record.

Stronger-than-expected November auto sales failed to lift carmakers. Ford Motor (F.N) shares slid 2.9% and General Motors (GM.N) dropped 2.5%.amid concerns that pent-up demand would no longer support the pace of sales gains beyond 2014.

On the positive side, Tesla Motors (TSLA.O) jumped 16.5% on heavy volume after Morgan Stanley named it a "top pick".

Elsewhere, Yum Brands Inc (YUM.N) fell 2.7% after it said November sales at established KFC restaurants in China failed to grow despite a successful promotion. It forecast a return to earnings-per-share growth in 2014.

Apple Inc (AAPL.O) rose 2.7% after UBS upgraded the iPhone maker's stock to "buy."

Krispy Kreme (KKD) Doughnuts Inc. plunged 20% after quarterly revenue missed analysts’ estimates.

Abercrombie & Fitch Co. rallied 5.8% after Engaged Capital LLC, which owned 400,000 shares as of 30 August, recommended the clothing retailer consider selling itself.

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