NEW YORKâThe Dow Jones Industrial Average posted its first triple-digit drop this year, as weakness in technology stocks helped derail a five-week rally for the blue chips.
The Dow sank 129.71 points, or 0.9%, to 13880.08, its biggest daily slide since Dec. 28. Monday's decline followed the Dow closing above 14000 for the first time since October 2007 Friday, having climbed 6.9% so far in 2013.
"What we're dealing with is that we've had quite a run higher, and it follows that it's time to digest some of those gains," said Brian Lazorishak, portfolio manager and quantitative analyst at Chase Investment Counsel.
The Standard & Poor's 500-stock index lost 17.41 points, or 1.2%, to 1495.71. All 10 S&P 500 sectors lost ground, with particular weakness in technology shares. Oracle (ORCL)
The technology-oriented Nasdaq Composite Index fell 47.93 points, or 1.5%, to 3131.17. Facebook (FB)
Broad declines in the U.S. followed those in Europe, where the Stoxx Europe 600 shed 1.5%. Spanish and Italian bond yields rose, and stocks from those countries declined sharply, on concerns about political graft and Italy's banking sector.
Spain's IBEX 35 index slid 3.8%, while Italy's FTSE MIB slumped 4.5%. Spanish Prime Minister Mariano Rajoy moved to contain a scandal over alleged cash payments to him. In Italy, weakness in bank stocks was compounded by a criminal investigation into derivatives trading.
"In the short run, a lot of the people who were ready-and-willing to buy stocks have already done so," said Bill Stone, chief investment strategist at PNC Asset Management Group. "And, in the backdrop today, the market is revisiting the jitters in Europe."
Asian markets were mostly higher after data released over the weekend showed a continued expansion in China's services sector in January. China's Shanghai Composite rose 0.4% and Japan's Nikkei Stock Average gained 0.6%.
In U.S. economic news, orders for manufactured goods rose in December, according to the Commerce Department, but its 1.8% increase was shy of a 2.2% rise expected by economists.
Stock-rating downgrades from analysts pressured a trio of Dow heavyweights. Drug maker Merck (MRK)
Wal-Mart Stores (WMT)
In other corporate news, Clorox (CLX)
Shares of rival ratings firm Moody's (MCO)
Health insurer Humana (HUM)
Front-month March crude-oil futures fell 1.6% to $96.17 a barrel, while February gold futures rose 0.4% to settle at $1,675.30 a troy ounce. The dollar rose against the euro, but slipped against the yen. Yields on benchmark 10-year Treasury notes fell to 1.973% as demand rose.
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