(Updated with closing prices.)
NEW YORK (
) -- Some market observers opted for caution over bearishness in the short term Monday as stocks in New York ended in the red -- but well off their worst levels of the day -- for an overall positive August.
The week started on a rough note after Chinese stocks took a beating, but that didn't tarnish the trend of the month. Since the final trading day of July, the
Dow Jones Industrial Average
gained 3.5%, the
added 3.4%, and the
For the day, the Dow fell 47.92 points, or 0.5%, to 9496.28, while the S&P 500 dropped 8.31points, or 0.8%, to 1020.62. The Nasdaq was off by 19.71 points, or 1%, at 2009.06.
Energy stocks were among those hardest hit, with
off by 3.2% and 3%, respectively, and the Philadelphia Oil Service Sector Index down 2.9% as
tumbled $2.78 to $69.96.
Those losses came as anxiety rippled through markets after the Shanghai Composite fell 6.7%, its greatest decline of the year. Among the contributing factors were an expected decrease in loans made by Chinese lenders, news that
Metallurgical Corp. of China
is planning a 16.85 billion yuan ($2.46 billion) initial public offering, and a wider-than-expected decline in first-quarter profit at
China Merchants Bank
The Chinese market definitely has a major topping pattern potentially forming, and historically China led us on the way up, so the big fears are obviously if the Chinese markets are starting to top here, what's that going to do to the overall global economy and to the U.S. economy," says Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
But in the shorter term, this looks a lot like what happened when the Chinese market pulled back sharply two weeks ago, says Detrick. This is another lighter volume week after this tremendous run up, and it could end up being a buying opportunity, at least for U.S. markets, he says.
Click below to hear what Detrick has to say on the Chinese market, U.S manufacturing, and what will drive stocks in the short and long term.
"In the short-term we remain cautious but not bearish," writes Jeffrey Saut, chief investment strategist for Raymond James, "because we think the equity markets will be higher by year-end than they are now.
"Still, at session 35 in the envisioned 'buying stampede' (aka, melt up), and knowing that it is rare for such stampedes to extend more than 30 sessions, we cannot help but be cautious in the short-term with the NYSE Bullish Percent Index (BPI) at 77.5%," he writes.
The market largely brushed off news that the Chicago purchasing managers' index increased for the third consecutive month to 50 -- precisely between contraction and expansion -- up from 43.4 and topping expectations for an increase to 47.2.
Among the day's movers,
fell 9.8% to $45.33following
over the weekend by
arguing the stock is overpriced. Also,
surged 25.2% to $48.37 after
the comic book company for a combination of cash and stock.
Stocks in Europe were mostly lower, including a 1% loss on the DAX in Frankfurt, despite a report that showed European consumer prices dropped less than expected in August.
Japan's Nikkei, although it ultimately lost 0.4%, initially rose after the Democratic Party of Japan pushed out the Liberal Democratic Party. The yen strengthened against other currencies.
In other news, the U.S. government has collected profits of about $4 billion from eight of the biggest banks that have fully repaid their obligations from the federal rescue of the banking system last year,
The New York Times
That includes about $1.4 billion on its investment in
, $1.3 billion on
and $414 million on
, according to the report.
-- Written by Elizabeth Trotta in New York.