US stocks decline at open on manufacturing data

Traders work on the floor of the New York Stock Exchange (NYSE) on July 29.
Traders work on the floor of the New York Stock Exchange (NYSE) on July 29.PHOTO: GETTY IMAGES/AFP

NEW YORK (BLOOMBERG) - U.S. stocks fell, after the Standard & Poor's 500 Index advanced last week, as manufacturing in the New York region slumped in August and energy shares retreated.

The S&P 500 lost 0.5 per cent to 2,081.49 at 9:32 a.m. in New York.

"Any report if it's bad enough could cause a downward move," said Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp. "The market has been jittery since China cut its currency. We've been in a bit of a pullback and that seems like it's going to continue."

The S&P 500 advanced 0.7 per cent last week, with the benchmark index erasing its gain for the year on China's currency devaluation before staging the biggest intraday turnaround in three years. The S&P 500 has been trading in the tightest trading range in nine decades.

Manufacturing in the New York region slumped at the fastest pace since the depths of the last recession, a report from the Federal Reserve Bank of New York showed Monday. The central bank branch's so-called Empire State index plunged to minus 14.9 in August, the lowest level since April 2009, from 3.9 the prior month. Readings less than zero signal contraction.

Investors are watching economic reports to gauge the economy's health.

The Federal Reserve releases minutes from its July meeting on Aug. 19, with market expectations of a September rate hike rising from a week before to about 50-50.

"It might be the last week with low volumes as most investors are starting to come back to work next week, and it's the end of the earnings season," said John Plassard, senior equity sales trader at Mirabaud Securities LLP in Geneva. "Many investors are waiting for the Fed minutes to be published on Wednesday after the factory data, which may give some fuel to people expecting a rate hike in September."