* S&P 500 falls 5 percent over the past four sessions
* Energy, material shares plunge on uncertain growth outlook
* Tenet Health to buy Vanguard Health; Keynote to be bought
* Indexes off: Dow 1.5 pct, S&P 1.8 pct, Nasdaq 1.7 pct
By Ryan Vlastelica
NEW YORK, June 24 U.S. stocks dropped more than
1 percent on Monday, extending a slide as investors worried
about the impact on equities from the Federal Reserve's plan to
exit its economic stimulus and a cash squeeze in China that
could hurt its economy.
All 10 S&P 500 sectors were solidly lower, with 94 percent
of stocks traded on the New York Stock Exchange and four-fifths
of Nasdaq-listed shares falling. Energy and material shares were
The S&P 500 has slumped 5 percent over the past four
sessions and dropped below its 100-day moving average. Last
week, it dropped decisively below its 50-day average, a sign
that near-term momentum may be toward the downside.
"The Fed sparked some to start exiting equities, but now
that's snowballing as everyone exits. It appears most people are
moving to cash," said Tom Donino, co-head of trading at First
New York Securities in New York, who added that the market may
continue to fall until it hits 1,550.
The Fed last week said that if the economy improves, it
would start to reduce a stimulus program widely credited with
fueling the market's 10 percent rally year to date. The comments
were the catalyst for a major market decline, with the S&P
posting its worst week in two month. Yields on 10-year
Treasuries jumped to more than 2.6 percent, its
highest level since August 2011.
The NYSE Arca gold bugs index lost 4.6 percent and
the PHLX gold/silver sector index fell 4.4 percent.
Markets in Shanghai and Hong Kong suffered heavy losses
after the People's Bank of China said banks needed to do a
better job of managing their cash and lending as the central
bank attempts to move the world's second largest economy away
from credit-driven investment.
The news sparked concerns that the region's economy could be
slowed further. Shares in Shanghai plummeted 5.3 percent
while Chinese shares tumbled to their biggest daily loss in
almost four years.
The Dow Jones industrial average was down 223.78
points, or 1.51 percent, at 14,575.62. The Standard & Poor's 500
Index was down 29.25 points, or 1.84 percent, at
1,563.18. The Nasdaq Composite Index was down 56.38
points, or 1.68 percent, at 3,300.87.
The S&P 500 has fallen 3.9 percent in June, putting
the benchmark S&P index on track to end a seven-month rise as
well as its worst monthly performance since May 2012. The index
is down 6 percent from its all-time closing high on May 21.
"Generally when you see declines this steep and severe,
equities find a bottom and recover somewhat dramatically," said
Donino. "I suspect that could happen soon."
While all 10 S&P sectors were lower, energy and materials,
both of which are tied to the pace of growth, were the weakest.
Cliffs Natural Resources sank 9.6 percent to $15.54 as
the biggest decliner on the S&P, followed by Consol Energy
, off 8.2 percent to $27.36 and Peabody Energy,
down 7.4 percent to $14.83.
U.S. hospital operator Tenet Healthcare Corp will
buy smaller rival Vanguard Health Systems Inc for $4.3
billion or $21 per share including debt to expand into new
locations. Vanguard shares jumped 68 percent to $20.73 and Tenet
gained 6 percent to $44.37 as the S&P's top advancer.
Barrick Gold Corp will lay off up to a third
of its corporate staff at its Toronto headquarters and other
offices, sources said, as the world's top bullion producer
downsizes more as the price of gold slumps. U.S.-listed shares
fell 5.2 percent to $16.02.
Keynote Systems Inc said it had agreed to be
acquired by an affiliate of private equity firm Thoma Bravo LLC
for about $395 million, or $20 per share. Keynote surged 46
percent to $19.78.
STEC Inc jumped 87 percent to $6.72 after Western
Digital Corp said it would buy the company for about
$340 million in cash. Western Digital shares shed 2.4 percent to