By Corrie Driebusch
U.S. stocks took another tumble Monday amid volatile trading and
following last week's sharp selloff, showing the growing anxiety of
investors.
In late afternoon trading, stocks fell sharply after seesawing
earlier in the day. The Dow Jones Industrial Average closed down
223.03 points, or 1.35%, to 16321.07. The S&P 500 index
declined 31.39 points, or 1.65%, to 1874.74 and the Nasdaq
Composite Index lost 62.58 points, or 1.46%, to 4213.66.
It marked the fifth consecutive three-digit move in the Dow
industrials.
The bond market was closed Monday for the Columbus Day
holiday,
Energy companies were among the biggest decliners, as Brent oil
futures, the international benchmark, dropped to a four-year low
after some of the biggest oil exporters indicated they would
maintain current production levels even as prices fall. Shares of
energy companies in the S&P 500 fell 2.9%.
Among the worst performers were exploration and production
companies and oil services companies, including EOG Resources,
which fell 6.8% to $83.76, and Halliburton Co., which declined 7.4%
to $50.26.
Early in the day, traders said investors were reluctant to place
big bets ahead of the deluge of corporate-earnings reports to be
released this week. In the quarterly reports investors are looking
for solid revenue figures and guidance as reassurance that the U.S.
economy is on track despite global growth concerns, traders and
strategists said.
"People want to see what the earnings picture is going to look
like," said Keith Bliss, senior vice president at brokerage Cuttone
& Co.
In the absence of hard news about market fundamentals, traders
said, investors instead reacted to afternoon rumors of Ebola
spreading.
"The market hates uncertainty and this is the ultimate
uncertainty. I don't know how to handicap it," said Seth Setrakian,
co-head of trading at First New York Securities. "People are
looking at headlines and rumors and would rather sit out the
hurricane and come back and play when there's sun again."
He said the fears were weighing on shares of airline companies.
United Continental Holdings Inc. dropped 7.3% to $40.55, while
Delta Air Lines fell 6.1% to $30.90.
Dramatic price swings ruled the market last week, with stocks
facing their most volatile stretch since 2011 on concerns about the
pace of global growth, but traders and strategists say as this week
continues corporate earnings should be the focus. Among the big
companies expected to report earnings this week are J.P. Morgan
Chase & Co. on Tuesday, Netflix Inc. on Wednesday and Google
Inc. on Thursday.
Marc Doss, regional chief investment officer for Wells Fargo
Private Bank, which manages $179 billion, said he is looking for
positive comments in quarterly reports from U.S. financial
companies to help boost confidence in the U.S. economy and lift the
equities market. In addition to J.P. Morgan, Citigroup Inc., and
Wells Fargo & Co. are also expected to report earnings Tuesday
before the market opens.
"The lifeblood of our economy is still banking and finance," Mr.
Doss said. "This week's financials earnings will hopefully show
that the U.S. economy is still healthy and there is still
risk-taking."
Also playing into Monday's move lower is the S&P 500 index
falling below its 200-day moving average, a market timing
indicator.
"The 200-day moving average is what a lot of people use as a
benchmark for general health of the market," says Frank Longman,
managing director of equity trading strategies at Brean Capital.
When an index falls below this trend line, "it tends to wake people
up."
Monday's declines in U.S. equities came amid a slip in European
shares. The Stoxx Europe 600 Index was down a fraction despite
being up earlier after stronger-than-expected trade data out of
China helped offset some investor fears of a slowdown in global
growth. European markets had opened lower, as stocks in the region
followed Friday's declines on Wall Street.
In Asian markets Monday, technology stocks fell further, led by
shares in Taiwan Semiconductor Manufacturing Co. that were down
3.6%, MediaTek Inc., down 4.1%; and Delta Electronics Inc., down
2.6%.
In commodity markets, gold futures rose 0.7% to $1229.30 an
ounce and crude-oil futures fell 0.1% to $85.74 a barrel.
The euro rose against the dollar, trading up 0.7% at
$1.2714.
In corporate news, shares of CSX Corp rose 5.9% to $31.70 after
The Wall Street Journal reported that Canadian Pacific Railway Ltd.
approached the railroad operator about merging.
Auto retailer Lithia Motors Inc. shares fell 21% to $64.01 after
it warned its third-quarter earnings will be lower than expected,
in part because of higher selling costs.
Write to Corrie Driebusch at corrie.driebusch@wsj.com