US STOCKS-Wall St edges down after mixed data; techs lead decline

Reuters

* U.S. services sector slows in December; factory orders up

* Twitter shares slide after several brokerage downgrades

* Men's Wearhouse launches hostile bid for Jos. A. Bank

* Dow off 0.3 pct; S&P 500 down 0.3 pct; Nasdaq off 0.6 pct

By Angela Moon

NEW YORK, Jan 6 (Reuters) - U.S. stocks declined slightly on Monday after mixed economic reports, which showed a slowdown in growth in the U.S. services sector and a rebound in new orders for factory goods.

The technology sector was the day's leading decliner after a downgrade by Morgan Stanley. Notes on Twitter and eBay weighed on the shares of both companies.

Despite the day's decline, the Dow Jones industrial average and the S&P 500 were still significantly above than their 200-day moving averages - a move below these technical levels often triggers more selling.

In the United States, data showed the pace of growth in the services sector slowed for a second straight month in December while new orders for U.S. factory goods rebounded in November.

Globally, service industry growth slowed sharply in China in December but picked up across most of Europe, suggesting that an uneven global economic performance persists.

"We believe a slower, extended economic recovery provides a supportive backdrop for stocks," said Jonathan Golub, chief U.S. market strategist at RBC Capital Markets, in New York. The firm raised its year-end target on the S&P 500 to 2,075, about 13 percent above current levels.

The Dow Jones industrial average fell 49.93 points or 0.3 percent, to 16,420.06. The S&P 500 lost 6.21 points or 0.34 percent, to 1,825.16. The Nasdaq Composite dropped 25.346 points or 0.61 percent, to 4,106.56.

Volume was expected to be lighter than usual due to icy conditions that snarled travel across the U.S. Midwest. Thousands of flights were canceled or delayed over the weekend, as forecasters warned that life-threatening cold was heading eastward.

Apparel retailer Men's Wearhouse mounted a hostile bid for rival Jos. A. Bank Clothiers with an increased offer, days after the smaller rival raised its buyout defenses. Men's Wearhouse shares gained 2.7 percent to $51.97, and Jos. A Bank shares added 4.5 percent to $56.88.

Twitter shares fell 5.4 percent to $65.29 after being downgraded by Morgan Stanley. The stock had surged nearly 70 percent in the past six weeks.

Morgan Stanley cut eBay to "neutral weight," sending its shares down 3 percent to $51.69.

Ford Motor Co and its local partners boosted sales in China by nearly 50 percent last year, nudging past Japanese giants Toyota and Honda to make big inroads into the world's largest auto market. Ford shares rose 0.7 percent to $15.60.

Solar panel shares were in focus. ReneSola rose 3.7 percent to $4.22 after the company secured a contract to supply solar panels to a solar project developer based in Japan. SolarCity jumped 9.1 percent to $64.67 after Goldman Sachs added the stock to its "conviction buy" list.

The U.S. Senate is set to vote at 5:30 p.m. (2230 GMT) to confirm Janet Yellen as the next chair of the Federal Reserve. Yellen, who has been the Fed's vice chair since 2010, is poised to become the first woman to head the U.S. central bank. She is widely seen as continuing the policies set in place by Ben Bernanke, who will step down as Fed chairman at month's end.

Rates

View Comments (0)