US STOCKS-Wall St drops on weak factory activity, tariffs on metal imports

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* Trump to restore levy on steel, aluminum imports
* U.S. factory sector contracts again in November
* Chinese PMI numbers better than expected
* Indexes fall: Dow 0.85%, S&P 0.85%, Nasdaq 1.24%

(Updates to early afternoon)
By Arjun Panchadar
Dec 2 (Reuters) - U.S. stocks fell on Monday after President
Donald Trump decided to restore tariffs on metal imports from
Brazil and Argentina, and weak factory activity fanned worries
of a slowing domestic economy due to a long-drawn trade war with
China.
The U.S. manufacturing sector contracted for a fourth
straight month in November and construction spending
unexpectedly fell in October. The reports follow last week's data that showed a slight
pickup in third-quarter economic growth and a steady rise in
consumer spending in October.
Earlier in the day, markets gained on an unexpected rebound
in Chinese manufacturing activity in November. But the upbeat
sentiment was dampened by Trump's tweet about restoring tariffs
on steel and aluminum imports, which surprised officials in
Brazil and Argentina who sought explanations. Shares of U.S. steel makers, however, rose.
"It is all about the macro news today and that is basically
overshadowing the good news on Black Friday and Cyber Monday,"
said Peter Cardillo, chief market economist at Spartan Capital
Securities in New York.
"The fact that the manufacturing sector is still in
recession obviously also rekindles trade worries."
A senior adviser to Trump said on Monday a deal with China
was still possible before the end of the year, adding that the
first phase of the agreement was being put to paper.
Hopes of a trade truce had helped Wall Street scale record
levels last month.
"We are coming off the market high ... any negative news is
going to cause investors to take profits," Cardillo said.
At 12:51 p.m. ET, the Dow Jones Industrial Average .DJI
was down 237.30 points, or 0.85%, at 27,814.11, the S&P 500
.SPX was down 26.76 points, or 0.85%, at 3,114.22 and the
Nasdaq Composite .IXIC was down 107.68 points, or 1.24%, at
8,557.80.
Retail stocks were in focus, with Cyber Monday sales on
course to bring in a record $9.4 billion. However, the sector
.SPXRT was down 1.22%. Energy sector .SPNY rose 0.10%, tracking oil prices. The
other 10 major S&P 500 sectors were trading lower. The
technology sector .SPLRCT slipped 1.43% and was the biggest
drag. O/R
Among other stocks, Roku Inc ROKU.O tumbled 14.45% after
Morgan Stanley downgraded its shares. Declining issues outnumbered advancers for a 2.71-to-1 ratio
on the NYSE and for a 2.76-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and two new
lows, while the Nasdaq recorded 58 new highs and 30 new lows.