Monday didn’t start out how investors might have hoped, as persistent worries about the Federal Reserve’s stimulus policy and a disquieting statement from The People’s Bank of China that led to losses in Asia sent U.S. stocks plunging early before a modest rally pared the losses by day’s end.
The People’s Bank urged a cautious lending approach for China’s largest banks, while asking them to to improve balance sheets, warnings that spread fears of a liquidity crunch through the markets.
The S&P 500 dropped 1.21% to close at 1573.09. The Nasdaq lost 1.09% to 3320.76, marking its worst four-day losing streak since 2011. The Dow Jones Industrial Average lost 0.94% to close at 14659.56, and has now shed a full 6% since it hit 15542.20 in May.
Leading the S&P 500 and Nasdaq lower was Apple (AAPL), which fell 3% and briefly dipped below $400 for the first time since mid-April, putting the stock down 25% year-to-date. Jefferies lowered its 12-month price target on AAPL from $420 to $405 based on weakness in iPhone sales and inventory levels.
A majority of the tech sector followed Apple down, with Yahoo (YHOO) tumbling nearly 4%, and Hewlett-Packard (HPQ) and Intel (INTC) falling close to 3%.
June did get another big Merger Monday. Vanguard Health Systems (VHS) surged after inking a $1.8 billion acquisition deal with Tenet Healthcare (THC). The $21-per-share offer represents a 70% premium to VHS’ Friday closing price. THC finished the day up more than 4%.
Meanwhile, Vodafone (VOD) bought Kabel Deutschland (KBDHY) — Germany’s largest cable operator serving nearly 8.5 million customers — for $10.1 billion, marking its entry into the growing German cable market. Vodafone finished up fractionally on the news.
Three Up
- Isis Pharmaceuticals (ISIS): Up 29.2% ($6.43) to $28.42.
- Hercules Offshore (HERO): Up 5.9% (38 cents) to $6.83.
- Blackberry (BBRY): Up 2.4% (33 cents) to $14.17.
Three Down
- Walter Energy (WLT): Down 16.1% ($2.04) to $10.60.
- Trina Solar (TSL): Down 7.7% (43 cents) to $5.16.
- Arch Coal (ACI): Down 6.7% (26 cents) to $3.65.
Marc Bastow is an Assistant Editor at InvsestorPlace.com. As of this writing he is long AAPL.
