U.S. stocks fell sharply on Monday, with the Dow Jones Industrial Average slammed with a triple-digit drop, as investors braced for quarterly earnings that begin in earnest this week.
"One driver is we're off to a mixed start to the earnings season; negative preannouncements exceed positive by a record 10-to-1 margin, so the bar has been set very low," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
Stocks declined to session lows after a speech Monday afternoon by Atlanta Federal Reserve President Dennis Lockhart, in which he said that if all goes as expected, the central bank would continue to taper its monthly bond purchases known as quantitative easing.
Equities had been "drifting lower, then Fed comments provided an extra leg down," said Dan Greenhaus, chief market strategist at BTIG. But, "stocks have been trading poorly for a couple of days now in front of earnings," with some people looking to corporate results to justify last year's performance, which had the S&P 500 rising more than 29 percent," Greenhaus added.
Calling S&P 500 valuation lofty by nearly any measure, Goldman said stocks could be
Apart from some major event, a rise in interest rates "in an accelerated manner" rather than a controlled one could spark a market correction of 10 percent, said Tim Speiss, a vice president at EisnerAmper Wealth Planning, who added that he was not forecasting such an event.
Major U.S. Indexes
Posting its worst session since Sept. 20, the Dow Jones Industrial Average lost 179.11 points, or 1.1 percent, to 16,257.94, with 29 of its 30 components finishing in the red.
. was the sole blue-chip gainer, up 6.5 percent. A preliminary review posted on the U.S. Food and Drug Administration's web site had the agency citing "robustly positive" clinical trial results in saying its blood clot-preventing drug vorapaxar should be approved.
The declined 23.17 points, or 1.3 percent, to 1,819.20, with consumer discretionary and energy the greatest laggards among its 10 major industry groups.
Beam surged after Japan's Suntory Holdings said it would acquire the maker of Jim Beam and Maker's Mark bourbons in a deal with a total value of $14 billion. Lululemon Athletica slid after the sportswear retailer cut its profit and sales outlook for the fourth quarter. Symantec fell after Morgan Stanley advised investors sell shares of the anti-virus software manufacturer. surged after Bloomberg cited two people familiar with the matter in reporting the maker of computer-networking equipment was being targeted by activist hedge fund Elliott Management.
The Nasdaq fell 61.36 points, or 1.5 percent, to 4,113.30. with among those weighing after the Israeli maker of carbonation systems cut its 2013 forecast.
About two dozen S&P 500 companies will report in the coming week, with JPMorgan Chase and Wells Fargo kicking off the season Tuesday morning. Intel reports Thursday, and General Electric on Friday.
