Wall Street lower on weak China data, fall in oil prices

February 1, 2016 12:45 PM

U.S. stocks were lower on Monday as weak Chinese economic data exacerbated concerns about a global slowdown and oil prices resumed their slide.  

The data from China showed that the world's second-largest economy's manufacturing sector contracted in January at the fastest pace since 2012.

Oil prices fell about 6% after the China data added to worries about demand and an OPEC source played down talk of an emergency meeting to stem the decline. Oil prices have fallen more than 70% since mid-2014.

Adding to the cautious note, data on Monday showed that U.S. consumer spending was unchanged in December and manufacturing activity continued to contract in January.

"The consumer spending numbers are a concern," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.

"We keep hearing that there is pent-up consumer demand that we are going to see down the line but we've seen little evidence of that."

Consumer spending accounts for more than two-thirds of U.S. economic activity and is seen as a bright spot in an economy affected by weak export growth and unsold merchandise.

The reports follow a weak reading of the GDP, which showed that the U.S. economy expanded at an anemic rate in the fourth quarter.

Investors will keep an eye on the monthly employment numbers later this week to gauge the strength of the labor market.

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Tanya Agrawal, Reuters