US stocks fall after Dow's rally to 14,000
Last Updated: 307 days ago
NEW YORK - U.S. stocks backed off their breathless rally Monday, falling sharply in the first trading session after major indexes soared to post-financial crisis highs.
The Dow Jones industrial average fell as much as 116 points in the first half-hour of trading. It was down 88 points at 13,921 as of 9:55 a.m. Eastern time.
The Standard & Poor's 500 index dropped eight points to 1,505. The Nasdaq composite index fell 10 to 3,168.
The declines followed a surge Friday that pushed the Dow over 14,000 for the first time since 2007, before the financial meltdown that routed world markets.
Friday was only the tenth time in its history that the Dow closed above 14,000. The first was in July 2007; the rest were in October of that year. The index closed Friday just 155 points shy of its record high, set that October.
The rally was powered by strong economic data, including a January jobs report that showed the labor is market strengthening gradually. The Institute for Supply Management reported a big jump in its index of manufacturing activity.
The Dow is up more than 6 percent this year. Yet Wall Street's celebratory mood was a distant memory by Monday, as U.S. stocks followed European markets lower. France's CAC-40 was down 1.6 percent, Germany's DAX 1.5 percent.
In New York, energy and health care stocks led the declines. Merck & Co. was the Dow's biggest loser, dropping 74 cents, or 1.8 percent, to $41.09. The pharmaceutical company said Friday that its earnings declined in the fourth quarter and 2013 might be weaker than analysts had hoped.
Corporate earnings reports continue this week. Health insurer Humana leapt $3.35, or 4.5 percent, to $78.70 after its earnings beat Wall Street's forecasts.
In Europe, political jitters about Spain and Italy pushed stocks lower. Some indexes were having their worst day in months.
Concerns over Europe's debt crisis have been eased since last summer, in part because of efforts by the Spanish and Italian governments to get their finances under control.
An upcoming election in Italy places some of those reforms in doubt. The Spanish government, meanwhile, is embroiled in a corruption scandal that's raising questions over the future of Prime Minister Mariano Rajoy.
The euro was trading 0.5 percent lower at $1.3571. The yield on the 10-year Treasury note fell to 1.99 percent from 2.05 percent earlier Monday as demand for ultra-safe assets increased.
Oil prices drifted lower. Crude fell $1.19 to $96.58 a barrel in New York.
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