* S&P 500 falls 4.8 percent over the past four sessions
* Materials, industrials and financial shares lead losses
* Stocks regain some ground as bond prices rise
* Tenet Health to buy Vanguard Health
* Indexes off: Dow 0.9 pct, S&P 1.2 pct, Nasdaq 1.1 pct
By Alison Griswold
NEW YORK, June 24 U.S. stocks fell more than 1
percent on Monday, adding to a sell-off built on concerns about
reduced stimulus from the Federal Reserve and on overnight
losses in Chinese equity markets.
The market shed some of the day's losses in the afternoon,
but it was the third time in the past four sessions that the S&P
500 dropped more than 1 percent. Volume was again above-average,
with 8.33 billion shares traded on U.S. exchanges, a sign that
the pullback has not abated yet.
Losses at one point extended as far as 2 percent, but stocks
retraced some ground after two Fed officials downplayed the
notion of an imminent end to monetary stimlus.
"We were really oversold in many different indices, so you
would expect a bounce. The trick is, is this going to continue
tomorrow?" said Sam Ginzburg, head of capital markets at First
New York in New York.
"I would be careful of this move up. I wouldn't be sure it
sticks as of this time."
Ginzburg said he would like to the S&P close over 1,600, a
level which was support but now is resistance.
All 10 industry sectors on the S&P 500 ended lower, led by
declines in materials, industrials and financial shares. Those
sectors are most sensitive to the growth outlook and rising
The Dow Jones industrial average finished down 139.61
points, or 0.94 percent, at 14,659.56. The Standard & Poor's 500
Index was down 19.34 points, or 1.21 percent, at
1,573.09. The Nasdaq Composite Index was down 36.49
points, or 1.09 percent, at 3,320.76.
Markets have been under pressure as investors cashed out of
losing positions in the last several days since the Fed
suggested it would cut back on its $85 billion in monthly bond
purchases before long.
The S&P 500 posted its worst weekly performance in two
months last week, and looked set to extend the sell-off coming
out of the weekend as developments in China's financial system
dampened sentiment on Wall Street.
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 China away from credit-driven investment.
Shares in Shanghai fell 5.3 percent while Chinese
financial shares dropped more than 7 percent.
Materials shares, which are often affected by
expectations for China's growth, dropped 1.7 percent. Cliffs
Natural Resources sank 7.6 percent to $15.88, making it
one of the biggest decliners on the S&P.
Stocks were able to cut losses after U.S. Treasuries prices
rebounded from substantial declines. The yield on the 10-year
Treasury note, which moves in the opposite
direction of the price, rose as high as 2.67 percent but later
dipped to 2.55 percent.
The Fed last week said if the economy improves, it could
begin to reduce its $85 billion in monthly bond purchases before
the end of the year.
One of the Fed officials who spoke Monday about the markets'
recent storm of selling was Richard Fisher, the hawkish head of
the Dallas Fed. He said the strength of the U.S. dollar reflects
confidence in the economy.
Fisher strongly backed Bernanke's timetable for QE3,
repeating the unprecedented stimulus should be slowly removed.
The S&P 500 has slumped 4.8 percent over the past four
sessions and breached both its 100-day and 50-day moving
averages, a sign that near-term momentum may be toward the
The S&P 500 has fallen 3.5 percent in June, putting
the benchmark index on track to end a seven-month rise as well
as its worst monthly performance since May 2012. The index is
down 5.8 percent from its all-time closing high on May 21.
Energy stocks were weak. Consol Energy fell 5.8
percent to $28.05 and Peabody Energy lost 7.2 percent to
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 67.3 percent to $20.70 and
Tenet gained 4.5 percent to $43.73 as the S&P's top advancer.