US stocks fall after disappointing factory data

U.S. stocks turned lower on Friday, with the S&P 500 extended losses into a third session, after economic reports showed manufacturing slowing at the end of 2014. “The manufacturing numbers we had today match what we saw in Asia overnight, they were a bit weak, and in thin volume, things can move pretty quickly,” JJ Kinahan, chief market strategist at TD Ameritrade, said of Friday’s shift from sharp gains to losses. The Institute for Supply Management’s manufacturing index came in at 55.5 in December, below expectations of a decline to 57.6 from 58.7 in November; separately, construction spending dropped 0.3 percent in November, versus a projected 0.3 percent gain. Shares of Bed Bath & Beyond (BBBY) rose after Canaccord Genuity upgraded the retailer to buy from hold.

Read More Early movers: CVEO, YHOO, NVS, GM, CLF, LINE & more Scaling from from a 128-point surge, the Dow Jones Industrial Average (Dow Jones Global Indexes: .DJI) was more recently off 47.83 points, or 0.3 percent, at 17,775.24, with Home Depot (HD) leading blue-chip declines that included 18 of 30 components. The S&P 500 (^GSPC) also cleared gains, lately down 9.31 points, or 0.5 percent, at 2,049.59, with consumer discretionary the greatest laggard and telecommunications faring the best of its 10 main industry groups . The Nasdaq (^IXIC) shed 31.75 points, or 0.7 percent, to 4,704.23. For every two shares rising, roughly three declined on the New York Stock Exchange, where 196 million shares traded as of 11:25 a.m. Eastern. Composite volume hit 937 million.

Volume was likely to be light throughout the session after the New Year’s Day holiday, with many traders taking a long weekend. The U.S. dollar (Exchange:.DXY) rose to a nine-year high against the currencies of major U.S. trading partners; the yield on the 10-year Treasury note (U.S.:US10Y) used to determine mortgage rates and other consumer loans fell 6 basis points to 2.1063 percent. After falling to $ 52.03, its lowest since May 1, 2009, crude-oil futures for February (New York Mercantile Exchange: @CL15G) delivery added 8 cents, or 0.1 percent, to $ 53.35 a barrel; gold for February (CEC:Commodities Exchange Centre: @GC15G) rose $ 5.50, or 0.5 percent, to $ 1,189.60 an ounce. “By and large, what happens today and Monday could set the tone for the first quarter. I expect the January effect to take hold, where small and mid-cap stocks outperform,” Peter Cardillo, chief market economist, Rockwell Global Capital, said. On Wednesday, stocks finished sharply lower, but ended December with a healthy advance for the year and fourth quarter.

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