Whether it was a delayed reaction to Friday’s bank downgrades or renewed fears from events in Europe over the weekend, investors came back Monday morning in a sour mood, and the market reflected that — stocks headed down from the opening bell before finally settling in with deep losses across the board.
The Nasdaq took the day’s biggest pummeling, down almost 2% to close at 2,836. The S&P 500 gave up 1.6% to finish the day at 1,313, and the Dow Jones Industrial Average fell just more than 1% to end Monday at 12,502. Wal-Mart (NYSE:WMT) was the only Dow stock not to fall, gaining 1.3% on the day.
In Europe, Greek finance minister Vassilis Rapanos, who has been hospitalized since Friday, resigned over the weekend, and Cyprus became the fifth eurozone country to seek a bailout — all in advance of a European Union meeting of leaders set to start later this week.
On Friday, Moody’s (NYSE:MCO) cut credit ratings for 15 U.S. banks, though bank stocks surprisingly rallied. The momentum did not hold into Monday, however, as bank stocks dove early in the day and never regained momentum, with Citigroup (NYSE:C), Bank of America (NYSE:BAC), Morgan Stanley (NYSE:MS) and UBS (NYSE:UBS) all down more than 4% on the day.
Good news from the U.S. housing market was unable to turn the tide, as the government reported sales of new homes rose 7.6% in May. Sales hit an annual rate of 369,000, according to the Census Bureau, compared with the revised April rate of 343,000, and a forecast rate of 350,000 new homes.
On the corporate front, Microsoft (NASDAQ:MSFT) led technology stocks lower, closing down 2.7% on the day despite announcing the decision to purchase Yammer, an enterprise social networking startup, for $1.2 billion in cash. Hewlett-Packard (NYSE:HPQ) and Intel (NASDAQ:INTC) each were down more than 3% on the day, with HPQ ending at a 52-week low of $19.55.
Speaking of new bottoms, Research In Motion (NASDAQ:RIMM) hit 2003 lows amid news it’s considering separating its handset manufacturing business from its messaging network. Nokia (NYSE:NOK) also hit multidecade lows, finishing down nearly 8% to $2.19 on the day. Both RIM and NOK are trying to find both more traction and customers as they fight for survival.
Meanwhile, Dell (NASDAQ:DELL) announced a plan to buy Quest Software (NASDAQ:QSFT) for for about $2.32 billion. Dell finished the day down 2%, while Quest shares gained 5% on the news.
- Constellation Brands (NYSE:STZ): Up 12.8% ($2.49) to $21.86.
- Supervalue (NYSE:SVU): Up 4.7% (23 cents) to $5.11.
- Teva (NYSE:TEVA): Up 4.5% ($1.71) to $39.72.
- Chesapeake Energy (NYSE:CHK): Down 8.5% ($1.58) to $17.03.
- Radioshack (NYSE:RSH): Down 7.8% (33 cents) to $3.91.
- Sprint (NYSE:S): Down 6.1% (20 cents) to $3.09.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long INTC and MSFT.