Stocks Sink as U.S. Manufacturing Slumps

Tickers in this article: MLM ^DJI DAL SVU VMC ^GSPC DECK BAC EFX BA SINGY DELL CSC LDK ^IXIC

Stocks opened Monday on a modestly strong note after Greece said it would buy back as much as €10 billion in outstanding debt and Spain made an official request for European Union bank bailout funds from the permanent European Stability Mechanism fund. Spain is set to receive €37 billion for the recapitalization of four banks.

Still, Andrew Wilkinson, chief economic strategist at Miller Tabak, said the markets later realized that the Spain request "is not the same as an official request for state-wide aid. Such a request is now unlikely before 2013 given the comfortable state of health for government funding for this year."

Another bright spot for the markets Monday was the read on the HSBC Purchasing Managers' Index for China -- a composite indicator designed to give a single-figure snapshot of operating conditions in the manufacturing economy. It came in at 50.5 in November, up from 49.5 in October and signaling a marginal improvement of operating conditions in the Chinese manufacturing sector.

Over the weekend, U.S. Treasury Secretary Timothy Geithner indicated that he's certain the Republicans will concede to raising taxes on the rich, while House Speaker John Boehner didn't seem to think so.

"Press coverage on the fiscal cliff abounds, but there has been disappointingly little tangible progress," said Michala Marcussen, head of global economics at Societe Generale. "Should negotiations fail and the cliff come into effect (a scenario that we put a 10% probability on), the impact would be very disruptive for both markets and the real economy. Note, in this tail risk scenario, we see a 90% probability that the cliff would then be dealt with retroactively, keeping the U.S. economy out of recession."

Gold for February delivery rose $8.40 to settle at $1,721.10 an ounce at the Comex division of the New York Mercantile Exchange, while January crude oil contracts added 18 cents to close at $89.09 a barrel.

Most Recent Quotes fromwww.kitco.com

The benchmark 10-year Treasury fell 2/32 to push the yield up to 1.624%. The dollar was off 0.41%, according to the U.S. dollar index.

In corporate news, Delta Air Lines (DAL) has reached out to Singapore Airlines (SINGY) about purchasing the Asian carrier's 49% stake in Virgin Atlantic Airways , according to reports.

Delta shares decreased 3.8%.

Gravel supplier Martin Marietta Materials (MLM) is likely to explore a friendly offer for rival Vulcan Materials (VMC) rather than launch another hostile takeover attempt, the Journal reported, citing people familiar with the decision.

Vulcan Materials shares were off 1%. Martin Marietta shares gained 0.50%.

LDK Solar (LDK) slashed its full-year revenue outlook to $950 million to $1 billion, from $1.1 billion to $1.5 billion, and forecast lower-than-expected fourth-quarter revenue of $230 million to $290 million amid predictions of a drop in solar cell and panel shipments driven by soft European demand and elevated U.S. import duties.