U.S. equities finished in the red on Monday, cutting midday losses into the closing bell, after a batch of poor manufacturing activity data. In China, the Markit manufacturing PMI fell to its lowest level since July 2013 as the evidence builds that something is very wrong with the economy of the Middle Kingdom amid ongoing financial market turmoil. Weakness was attributed to weather, commodity prices and the selloff in domestic shares.
Here at home, the July ISM manufacturing report fell on a month-over-month basis and missed expectations.
In the end, the Dow Jones Industrial Average lost 0.5%, the S&P 500 lost 0.3%, the Nasdaq Composite lost 0.3%, and the Russell 2000 lost 0.6%.
Defensive utility stocks carried the day with a 0.6% gain, while energy led the laggards with a 2% loss. Many popular technology stocks were hit, with Apple Inc. (NASDAQ:AAPL) down 2.4% as it closed below its 200-day moving average for the first time since 2013 — on ongoing disappointment with its underwhelming iPhone and China sales. Twitter Inc (NYSE:TWTR) lost 5.6%.
Crude oil was under pressure again, falling 3.8% to close at $45.36 a barrel in the wake of Friday’s expanded U.S. drilling rig count. Prices have returned to lows not seen since March.
Iranian oil minister Bijan Zanganeh said that production could be increased by 500,000 barrels per day one week after sanctions are lifted and by 1 million barrels per day in a month. Thanks to the nuclear deal, sanctions are expected to be lifted by late November.
That helped push the ProShares UltraShort Crude Oil (NYSEARCA:SCO) recommended to Edge subscribers to a gain of nearly 60% since the position was added in late May.
In other news, Greece’s stock market fell 16.2%, after trading down as much as 23%, after opening for the first time in five weeks. The country is seeking another bailout deal that needs to be hammered out by August.
After the close, Puerto Rico failed to make a bond payment resulting in the first default by a U.S. Commonwealth in history.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Two- and four-week trial offers have been extended to InvestorPlace readers.
