Wall Street ends lower; S&P 500 in biggest three-day drop since January

NEW YORK Mon Apr 7, 2014 7:22pm EDT

1 of 3. Traders work on the floor of the New York Stock Exchange April 7, 2014.

Credit: Reuters/Brendan McDermid

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NEW YORK (Reuters) - U.S. stocks fell on Monday with the S&P 500 posting its biggest three-day drop in two months, as investors bid down Internet stocks and rotated into defensive names to protect against further declines.

Internet stocks were among the day's biggest decliners with Amazon.com (AMZN.O) down 1.6 percent at $317.76 and Yahoo! Inc (YHOO.O) off 3.5 percent at $33.07. The Global X Social Media ETF (SOCL.O) which includes Groupon Inc (GRPN.O) and LinkedIn (LNKD.N) fell 2.5 percent.

The Nasdaq index .IXIC posted its worst three-day decline since November 2011.

But the biotechnology sector, which saw sharp declines in the past several sessions, ended higher with the Nasdaq biotech sector index .NBI up 0.5 percent at 2,367.94.

Selling pressure migrated to other sectors, with only defensives such as utilities .SPLRCU and consumer staples .SPLRCS in positive territory among the 10 major S&P sectors.

"This type of market behavior (buyers favoring defensive names) suggests investors are turning cautious again after the big gains in stocks during the past year," said Gary Thayer, chief macro strategist at Wells Fargo Advisors.

"We remain long-term positive on the U.S. economy and the U.S. stock market but expect increased volatility risk this spring and summer."

The CBOE Volatility index VIX .VIX, often used to gauge investor sentiment on Wall Street, jumped 11.5 percent to 15.56. The index usually moves inversely to the S&P 500.

Dish Network Corp (DISH.O) was among the top decliners on the Nasdaq 100 .NDX, down 4.4 percent at $59.51.

The Dow Jones industrial average .DJI fell 166.84 points or 1.02 percent, to 16,245.87, the S&P 500 .SPX lost 20.05 points or 1.08 percent, to 1,845.04 and the Nasdaq Composite .IXIC dropped 47.973 points or 1.16 percent, to 4,079.753.

Pfizer Inc (PFE.N), down 3 percent to $31.20, added pressure to the Dow and S&P 500. The company's experimental breast cancer drug in a clinical trial nearly doubled the amount of time patients lived without their disease getting worse, but overall survival was not yet shown to be statistically significant, researchers said.

Earnings season gets under way this week, with results due from financials JPMorgan Chase & Co (JPM.N) and Wells Fargo & Co (WFC.N), as well as retailer Bed, Bath & Beyond (BBBY.O).

S&P 500 companies' first-quarter earnings are projected to have increased just 1.2 percent from a year ago, Thomson Reuters data showed. The forecast is down sharply from the start of the year, when growth was estimated at 6.5 percent.

A lackluster first-quarter earnings season hurt by a harsh winter could spark a pullback, some analysts said, with investors more optimistic for the second quarter.

Specialty pharmaceuticals company Mallinckrodt Plc (MNK.N) agreed to buy drugmaker Questcor Pharmaceuticals Inc QCOR.O for about $5.6 billion to gain access to its multiple sclerosis drug, Acthar Gel. Questcor shares climbed 18.7 percent to $80.58 while Mallinckrodt dropped 2.5 percent to $60.95.

About 7.5 billion shares changed hands on U.S. exchanges, above the 6.6 billion average so far this month, according to data from BATS Global Markets.

(Reporting by Angela Moon; Editing by Nick Zieminski)

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Comments (16)
tmc wrote:
Why do you at Reuters feel the need to keep running paragraph or two about the markets? In this modern day getting the numbers is not just easy, but often just stuffed in your face anyway. The need to try and express why the trading activity is currently up or down just makes you look foolish. Its just the trading of the day. On rare occasions something will happen to trigger a large change across markets. This is worthy of you attention and you won’t look foolish. But that means a SIGNIFICANT change. like 300 point in an hour or more.
Try and keep up with world. It is your business after all. Just because “we’ve always done it” needs to be looked at once in a while.

Apr 07, 2014 9:58am EDT  --  Report as abuse
bertanderson wrote:
Somewhat of a broad base selloff. All stocks are a little overpriced.

Apr 07, 2014 10:34am EDT  --  Report as abuse
Endoftheworld wrote:
I think the markets will fall. They must fall for people to take profits. The problem is that those who lose will abandon the market.

Apr 07, 2014 1:28pm EDT  --  Report as abuse
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