Disappointing manufacturing numbers kicked off the week today sending the Dow Jones Industrial Average down 60 points or 0.5%. The Institute for Supply Management said that its manufacturing index dropped to its lowest level since 2009, at 49.5, indicating a slight contraction. Economists blamed Superstorm Sandy and the fiscal cliff for the downturn, and the report helped drown out brighter news abroad as Chinese factory output started growing for the first time in more than a year. In Europe, investors applauded Greece's decision to buy back as much as 10 billion euros in outstanding debt and Spain's move to ask for 37 billion euros in funding to recapitalize four banks.
On the fiscal cliff front, Congressional Republicans announced their own plan, which includes lifting the eligibility age for Medicare and reducing cost-of-living increases for Social Security. The plan would also raise $800 billion in tax revenues over the next 10 years but would keep the Bush tax cuts in place for now.
Turning to individual stocks, DuPont led the losers, falling 1.7% partly in response to revelations that the company lied to investigators about its right to use a seed technology developed by Monsanto . According to Judge Richard Webber, Dupont "knowingly perpetrated a fraud against the court," an incident that is part of its defense in a patent lawsuit with Monsanto. DuPont rejected the judge's claims.
Cisco bucked the market trend today, gaining 0.6% on the heels of its acquisition last week of software maker Cariden Technologies for $141 million. The purchase should help Cisco manage its increasing mobile traffic, and is expected to close by January. Cariden, whose sales are tied to the smartphone market, said its revenues have grown by a compound annual rate of 50% over the last five years.
Finally, November auto sales were particularly strong, boosted by Superstorm Sandy, which delayed late October purchases. Sales from Honda and Toyota jumped 39% and 17%, respectively, from a year ago, while American car makers Ford and GM saw only single-digit increases.
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