By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks closed sharply lower on
Monday, with the S&P 500 falling by its largest margin in
nearly seven weeks.
Investors turned skittish as they fretted about falling
commodity prices and concerns about global growth.
A decline in economic activity in August, measured by Chicago
Federal Reserve as well as a drop in existing-home sales
contributed to the dour Wall Street mood.
The S&P 500 (SPX) closed 16.11 points, or 0.8%, lower at
1,994.29. The Dow Jones Industrial Average (DJI) dropped 107.06
points, or 0.6%, to 17,172.68. The Nasdaq Composite (RIXF) fell
52.10 points, or 1.1%, to 4,527.69.
Randy Frederick, managing director for trading and derivatives
at Charles Schwab, said that market volatility is expected to rise
in the next several weeks.
"The end of tapering in October will coincide with midterm
elections, which is historically a volatile period for stocks. We
would caution investors in the near term and hedge against 3%-5%
pullback," Frederick said.
Data released on Monday, shows U.S. economic activity was
lackluster in August. Sales of existing homes unexpectedly declined
in August, for the first time in five months, the National
Association of Realtors reported Monday. NAR attributed the drop to
fewer all-cash sales to investors.
China worries festering: Hong Kong's Hang Seng Index fell to
two-month lows on Monday as traders worried ahead of the HSBC
estimate for China's September purchasing managers index, due after
the close of U.S. markets.
Any number under 50 -- indicating contraction -- could mean more
losses for Asia markets, barring meaningful stimulus measures. At a
G-20 meeting over the weekend, China's Finance Minister Lou Jiwei
said the country is facing downward pressure, but won't "make major
policy adjustments" due to changes in any individual economic
indicator.
"We're not going to see this wall of money thrown at the Chinese
slowdown," Stuart Beavis, head of institutional equity derivatives
at Vantage Capital Markets in Hong Kong, told Bloomberg News.
Stocks to watch: Alibaba shares fell 4.3% on the second day of
trading. With the e-commerce company's underwriters set to exercise
an option to sell additional shares, the IPO is now officially the
world's largest, Dow Jones Newswires reported Sunday.
Shares in Apple, Inc.(AAPL) closed slightly higher after the
company said iPhone 6 sales topped 10 million during the first
weekend, a new Apple record.
AutoZone Inc. (AZO) reported fiscal-fourth quarter earnings that
topped estimates, but sales were slightly below forecasts. Shares
were dropped 4%.
Dresser-Rand Group Inc. (DRC) gained 2.6% after German
engineering company Siemens AG announced a deal to buy the U.S.
oil-equipment maker for $7.6 billion.
Shares of Sigma-Aldrich Corp. soared 33% after Merck & Co.
Inc. (MRK) said Monday it will pay $140 per share for the
life-science and technology company, a price that values the
company at around $17 billion. (Read more about the day's notable
movers here:
http://www.marketwatch.com/story/alibaba-autozone-in-spotlight-2014-09-21.)
Other markets: Silver(SIZ4) prices fell to four-year lows on
Monday on dollar strength. Gold (GCZ4) recovered and settled $1.30
higher at $1,217.90 per ounce. The dollar was largely unchanged but
hovered around Yen109.15 Monday, just under a six-year high reached
Friday.
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