Stocks extended a modest drop on Monday after business activity in Chicago fell into contraction for the sixth time this year.
The S&P 500 was down 0.2%, the Dow Jones Industrial Average declined 0.2%, and the Nasdaq fell 0.06%.
Business activity in the Chicago area fell sharply in November, according to the latest Chicago PMI reading. Chicago PMI fell into contraction with a reading of 48.7, down from 56.2 in October. A sharp decline in new orders weighed heavily on the index.
Pending home sales in the U.S. rose 0.2% in October, recovering from two months of declines, though coming in lower than an expected 1% increase. Weaker results were tied to high prices and lower inventory that kept home buyers from making the move to buy.
Some argued that the two pieces of weak data out Monday will only have a transitory impact on trading as investors look toward bigger news out later in the week, including a European Central Bank meeting on Thursday and November's jobs report on Friday.
"While the U.S. economic calendar is saturated with meaningful data today, the data will most likely only have a passing impact as traders keep an eye on the flashier headliners," said Christopher Vecchio, currency analyst at DailyFX. "There's little incentive for market participants to stake out large positions before the week is through."
The November jobs report, due Friday, is the key release of the week and the most important piece of data between now and when the Federal Reserve meets on Dec. 15. Economists expect 185,000 jobs to have been added to U.S. nonfarm payrolls over the past month.
A stronger number will do little to alter expectations about the Fed, with the chances of a rate hike in December currently at more than 70%. But if the November jobs report turns out to be a dud, the Fed's thinking will be anyone's guess.
The central bank has strongly suggested in recent weeks that a hike will come sooner than later, even if it continues to depend upon economic data. Fed Chair Janet Yellen will speak on Wednesday and Thursday and is expected to reiterate the Fed's previous party line that the economy continues to prove and warrants a move off of crises-level rates.
The International Monetary Fund is expected to announce that the yuan, China's currency, will join its basket of reserve currencies. The IMF currently only holds the U.S. dollar, the euro, the British pound, and Japan's yen to that level. China asked for its currency to be included as a reserve currency last year.
Cyber Monday, a sales event limited to online shopping, kicked off Monday. Around 121 million shoppers plan to shop online over the day, according to the National Retail Federation, down slightly from 126.9 million a year earlier. The SPDR S&P Retail ETF (XRT) - Get Report fell 0.9%, while Macy's (M) - Get Report , Walmart (WMT) - Get Report and Target (TGT) - Get Report were each lower.
Expectations were tempered by disappointing Black Friday sales. ShopperTrak said sales at retail stores on Black Friday this year totaled $10.4 billion, down 10.3% from 2014, while sales on Thanksgiving Day declined 10% to $1.8 billion.
Anheuser-Busch (BUD) - Get Report shares climbed on plans to sell SABMiller's (SBMRY) two best-known beer brands, Grolsch and Peroni, to ease regulatory concerns ahead of its acquisition. The deal has not been finalized, according to The Wall Street Journal.
BHP Billiton (BHP) - Get Report slid nearly 5% after the Brazilian government threatened to launch a multibillion-dollar legal suit over a dam failure in Minas Gerais earlier in November. The mining company said it hasn't received a formal suit yet but will "asses the case once it has been filed."
Ford (F) - Get Report shares edged higher after the automaker said it expects to incur a $600 million charge tied to its recent collective bargaining agreement with the United Auto Workers union. The agreement, which covers 53,000 U.S. employees, ends a limit on entry-level employments and increases the flexibility to use temp workers.
Lions Gate (LGF) shares were on watch after its film The Hunger Games: Mockingjay - Part 2 topped the Thanksgiving weekend box office, holding onto the top spot for the second week in a row. The fourth film in the Hunger Games franchise generated $75.8 million in domestic ticket sales, pushing its total domestic sales to $198.3 million. The movie beat out Disney's (DIS) - Get ReportThe Good Dinosaur, a Pixar film.
Lululemon (LULU) - Get Report dropped nearly 5% after shares were downgraded to market perform from outperform at FBR Capital Markets. Analysts gave the athleisure retailer a $42 price target, arguing that the company is seeing higher clearance levels, which will likely pressure margins.