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* Trump to restore steel, aluminum import tariffs
* U.S. manufacturing contracts in Nov. for 4th straight month
* Online holiday spending seen hitting record
* Indexes fall: Dow 0.67%, S&P 0.62%, Nasdaq 0.95% (Updates to late afternoon, changes dateline, byline)
By Stephen Culp
Dec 2 (Reuters) - Wall Street retreated on Monday as disappointing U.S. economic data and fresh trade worries dampened investor risk appetite.
All three major U.S. stock averages began the last month of the year in the red, pulling back from last week's record highs.
"It's a quiet day as investors recover from Thanksgiving. As investors settle back at their desks," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
A report from the Institute for Supply Management (ISM) showed U.S. manufacturing activity contracted in November for the fourth consecutive month, fueling worries that the longest period of economic expansion in U.S. history could be growing short-winded.
Earlier, President Donald Trump tweeted that he would restore tariffs on steel imported from Brazil and Argentina, boosting shares of U.S. steel makers U.S. Steel Corp and AK Steel Holding Corp by 3.5% and 5.6%, respectively.
Still, it was the latest sign that the hydra-headed trade disputes between the United States and its trading partners will continue to rattle markets and hinder global economic growth.
The news comes on the heels of recent Wall Street highs, driven to new records last week on hopes of an imminent "phase one" trade deal between the U.S. and China.
Indeed, a senior adviser to Trump said on Monday it was still possible that a deal with China could be reached by year-end.
"Markets have had a great run this year and expectations are already high that a trade deal gets done," Carter added. "Any reversal here is likely to negatively impact markets, which is likely what we're seeing today."
"The most recent tariff tweet has reminded markets that there's a lot of uncertainty around trade policy and U.S. actions," said Carter.
The Dow Jones Industrial Average fell 187.67 points, or 0.67%, to 27,863.74, the S&P 500 lost 19.4 points, or 0.62%, to 3,121.58 and the Nasdaq Composite dropped 82.29 points, or 0.95%, to 8,583.18.
Of the 11 major sectors in the S&P 500, only energy was in the black, boosted by rising crude oil prices.
Real estate, technology and communications services were the largest percentage losers.
Investors eyed retail stocks, as Cyber Monday sales were expected to hit a record following $11.6 billion in online sales on Thanksgiving and Black Friday.
Among other stocks, Roku Inc dropped 12.7% following Morgan Stanley's downgrade to "underweight".
Declining issues outnumbered advancing ones on the NYSE by a 2.61-to-1 ratio; on Nasdaq, a 2.58-to-1 ratio favored decliners.
The S&P 500 posted 16 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 62 new highs and 33 new lows. (Reporting by Stephen Culp Editing by Chizu Nomiyama)