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Stock benchmarks post slight monthly gains

Adam Shell
USA TODAY

U.S. stocks traded modestly lower Monday as Wall Street kicked off a big week with investors eyeing Cyber Monday sales, a key bankers meeting in Europe Thursday that could result in more stimulus efforts and the monthly U.S. jobs report on Friday.

The Dow Jones industrial average, S&P 5000 and Nasdaq composite, despite losing about 0.4% each on the day, still managed modest gains for November.

In this May 11, 2007, file photo, a Wall Street sign is mounted near the flag-draped facade of the New York Stock Exchange.  (AP Photo/Richard Drew, File)

It has been an up-and-down year for the U.S. stock market, which has been trading sideways in recent weeks since rebounding from the market's first 10% price drop in nearly four years. Heading into today's trading session, which marks the final day of November, the broad Standard & Poor's 500 stock index is up just 1.5% for the year and still down about 2% from its late May record close of 2130.82.

Cyber Monday will get its fair share of coverage. But so will a big batch of economic data, ranging from fresh readings on housing, manufacturing, vehicle sales, and factory orders. But "Jobs Friday" is the main economic data point to watch, says Josh Selway, an analyst at Schaeffer's Investment Research.

"November's nonfarm payrolls report, scheduled for release on Friday, will attract the most attention," Selway told clients in a report. "In the meantime, traders will continue to consider the latest retail sales figures as the holiday season rages on."

The focus in recent days, of course, has been on holiday retail sales, which account for a big chunk of retailers' total sales for the year. The National Retail Federation estimated that 151 million Americans shopped this weekend, kicking off with early story openings on Thanksgiving followed by Black Friday. Next up is so-called Cyber Monday, the biggest online shopping day of the year. Adobe estimates that online shoppers will spend roughly $3 billion today.

Retail sales are closely watched, as it gives Wall Street a snapshot into the health and psyche of U.S. consumers and the overall health of the U.S. economy.

But there are other potential market-moving events in Wall Street's sights this week. The European Central Bank meets on Thursday and is widely expected to announced further stimulus measures to boost lagging growth in the eurozone and pump up low inflation readings. The prospect of the ECB providing more stimulus comes at a time when the the Federal Reserve, the U.S. central bank, is thinking of hiking interest rates in December for the first time in almost a decade. Wall Street is closely watching both developments, as the so-called divergence in policy could have ramifications for all sorts of assets, ranging from the value of the U.S. dollar relative to other currencies, including the euro, as well as stocks, commodities and bonds.

That's why the November jobs report set for release by the government on Friday will be so closely watched. If the U.S. economy, which generated a much-better-than-expected 271,000 jobs in October, can deliver another strong month of job gains, it will all but cement a Fed interest rate increase at the U.S. central bank's last meeting of the year on Dec. 15-16.

Low rates, of course, have been cited as a main driver of the stock market's big rally since the bear market low back in March 2009.

Stocks were trading higher in Europe, as investors there bet on more support from the ECB this week. The broad Stoxx Europe 600 was 0.5% higher, while Germany's DAX was up 0.9% and the CAC 40 in Paris was 0.6% higher.

Shares were mixed in Asia. The Nikkei 225 in Tokyo fell 0.7%. The Hang Seng index in Hong Kong was off 0.3%, while stocks in mainland China's Shanghai composite rebounded from a big loss Friday to climb 0.3%.

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