By SARA LEPRO
AP Business Writer

(AP:NEW YORK) Investors uneasy about the holiday shopping season gave Monday back some of Wall Street’s recent gains, sending the Dow Jones industrial average down more than 360 points.

While initial reports about the start of holiday shopping this weekend suggested sales were better than some retailers and analysts expected, Americans are clearly extremely cautious. That has Wall Street concerned about the impact of a continuing drop in consumer spending on the economy.

According to preliminary figures released by RCT ShopperTrak, a research firm that tracks total retail sales at more than 50,000 outlets, sales rose 3 percent to $10.6 billion on Black Friday _ the day after Thanksgiving that is traditionally one of the biggest shopping days of the year. But some analysts are concerned that Black Friday’s results aren’t indicative of the rest of the weekend.

"After a slow start to November, we believe strength on Black Friday was not enough to save the month," said John Morris, an analyst at Wachovia Capital Markets. "The strength did not carry through the remainder of the weekend, as business fell off sharply on Saturday, according to our field team."

RCT ShopperTrak is expected to release data for the combined Friday and Saturday period on Monday.

Wall Street is concerned that consumers, by curtailing their spending further, won’t be able to help lift the economy from its slump.

Meanwhile, a pair of downbeat economic reports did little to alleviate investors’ concerns. The Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity fell to a 26-year low in November. At the same time, the Commerce Department said construction spending fell by a larger-than-expected amount in October.

Both the housing and manufacturing sectors have been suffering for some time, so the reports were ultimately unsurprising. Still, they served as further evidence that the economy remains under pressure.

In midmorning trading, the Dow Jones industrial average fell 367.26, or 4.16 percent, to 8,461.78. Standard & Poor’s 500 index dropped 43.69, or 4.87 percent, to 852.55, while the Nasdaq composite index fell 74.04, or 4.82 percent, to 1,461.53.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.83 percent from 2.92 percent Friday. The yield on the three-month T-bill, considered one of the safest investments and an indicator of investor sentiment, slipped to 0.03 percent from 0.05 percent Friday. The lower the yield, the more anxious investors tend to be.

Some stock selling was to be expected Monday considering the magnitude of last week’s advance, when stocks posted some of their steepest gains in decades. The Dow has gained 16.9 percent and the S&P 500 index 19.1 percent since a rally that began Nov. 21; it was the first five-day string of gains for both the Dow and the S&P 500 since July 2007.

In addition to the concerns about consumer spending, investors’ fears about the financial sector once again weighed on the market. Morgan Stanley shares dropped $1.57, or 10.6 percent, to $13.18 . Goldman Sachs Group Inc. fell $7.22, or 9.1 percent, to $71.77.

Financial stocks got a boost last week after the government stepped in to rescue Citigroup Inc. The government injected a fresh $20 billion into the banking giant and said it would guarantee up to $306 billion of the bank’s risky assets. Investors have been skittish in recent weeks that financial firms will continue to post big losses following the mortgage bust.

Wall Street is also awaiting some sort of resolution for the nation’s top three automakers, which return to Washington this week in search of $25 billion in government support.

Chrysler LLC, Ford Motor Co. and General Motors Corp. are to submit stabilization plans to Congress on Tuesday. The plans will be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.

Congress may reconvene next week to consider the auto bailout if the plans prove satisfactory. Lawmakers have been deeply divided on providing aid to the auto industry, with many in both parties wary of supporting another costly government rescue.

Automakers are also scheduled to report November U.S. auto sales on Tuesday.

In corporate news, health care products company Johnson & Johnson said it will buy Mentor Corp., a medical products supplier, for $31 a share, or $1.07 billion. The offer represents a 92 percent premium over Mentor’s closing stock price of $16.15 on Friday.

Mentor shares shot up nearly 90 percent to $30.67, while Johnson & Johnson shares slipped $1.68, or 2.9 percent, to $56.90.

Light, sweet crude dropped $3.21 to $51.22 a barrel on the New York Mercantile Exchange after OPEC decided not to cut production at an informal meeting in Cairo on Saturday. The Organization of the Petroleum Exporting Countries, which accounts for about 40 percent of global supply, reduced output quotas in October by 1.5 million barrels a day.

The dollar fell against other major currencies. Gold prices also fell.

Overseas, Japan’s Nikkei stock average fell 1.35 percent. In afternoon trading, Britain’s FTSE 100 was down 3.67 percent, Germany’s DAX index was down 5.74 percent, and France’s CAC-40 was down 4.69 percent.

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