Retail shares weigh on US stocks, Europe awaits ECB

[NEW YORK] Worries about weak holiday retail sales weighed on US stocks Monday, while bourses in Paris and Frankfurt advanced ahead of a European Central Bank meeting that could launch additional stimulus.

Stocks avoided major swings at the start of a news-jammed week that, besides the ECB gathering, includes the US jobs report for November, speeches by Federal Reserve Chair Janet Yellen and a meeting of the Organization of the Petroleum Exporting Countries.

In the US, the broad-based S&P 500 ended down 0.5 per cent.

The retreat in the US was due to declines of virtually every major company in the retail sector following the kickoff of the holiday shopping season after the Thanksgiving holiday. Global behemoth Wal-Mart Stores lost 1.8 per cent, while big-box rival Target and online giant Amazon both fell 1.3 per cent.

"The concern is that the consumer isn't going to show up," said Art Hogan, chief market strategist at Wunderlich Securities.

A weekend report from analytics company ShopperTrack estimated lower sales in brick-and-mortar stores on "Black Friday," the day after Thanksgiving.

However, Mr Hogan said such benchmarks have become less telling because of the growth of online commerce and the lengthening out of the shopping season.

In Europe, Frankfurt's main DAX index added 0.8 per cent and Paris 0.6 per cent, but London's benchmark FTSE 100 index slid into the red, losing 0.3 per cent.

The euro gave ground against the dollar and other currencies in expectation the ECB will announce additional stimulus after a monetary policy meeting Thursday.

"Expectations are running high for the ECB to deliver a potent dose of low-rate policies to help boost dangerously low inflation and growth," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

"But with lofty expectations comes an elevated risk of disappointment should any action by the central bank underwhelm markets."

Among individual stocks, mining giant BHP Billiton ended down 1.3 per cent as it continued to suffer losses following news that the Brazilian government planned to seek US$5.2 billion in damages from it and Vale in the wake of the November 5 collapse of a waste water dam in Brazil.

BHP Billiton said Monday that 13 people died and six remained missing from the flood of mud and waste water triggered by the breaking dam at the mine near Mariana in southeastern Brazil.

In the US, office supply chain Office Depot fell 2.4 per cent and its rival Staples lost 2.0 per cent on the heels of a New York Post report that US antitrust regulators will try to block their merger.

AFP