U.S. stocks open lower after Japan's downgrade, tepid holiday sales

U.S. stocks opened lower Monday following a downgrade of Japan's debt rating and tepid sales figures of the Thanksgiving holiday.

Moody's Investors Service, a global rating agency, early Monday downgraded the Japanese government debt rating by one notch to A1 from Aa3, citing heightened uncertainty over the achievability of fiscal deficit reduction goals as a reason following Prime Minister Shinzo Abe's decision to delay the second round of sales tax hike last month.

Moreover, soft sales data of the Thanksgiving holiday dragged down retail stocks. The world's largest retailer Wal-Mart Stores' shares slipped 1.34 percent in early trading, while U.S. department store chain Macy's shares dipped 2.74 percent.

The National Retail Federation said Sunday in a survey that total spending over the Thanksgiving weekend is expected to reach 50.9 billion U.S. dollars, down from last year's estimated 57.4 billion dollars, as early holiday promotions, the continued growth of online shopping and an improving economy changed the way millions of people do holiday shopping.

Falling oil prices continued to pressure the stock market. Brent crude prices touched a five-year low on Monday before recouping part of the losses.

On the economic front, the final reading of the U.S. Manufacturing Purchasing Managers' Index registered 54.8 in November, representing the weakest expansion of U.S. manufacturing output since January, said financial data firm Markit.

Shortly after the opening bell, the Dow Jones Industrial Average lost 56.93 points, or 0.32 percent, to 17,771.31. The S&P 500 dropped 8.29 points, or 0.40 percent, to 2,059.27. The Nasdaq Composite Index lost 12.29 points, or 0.26 percent, to 4,779.34.