Broad Sell-Off to Start the Week

by: Roy Mehta

The Dow Jones Industrial Average slipped 172.65 points (-1.3%), the Standard & Poor's 500 index ended 22.1 points lower (-1.5%), and the Nasdaq fell 61.3 points (-2.3%) Monday. Volume on the NYSE was 1.39 billion shares, and decliners routed advancers by a ratio of about 5:1.

Weakness Monday was caused by Citigroup's (NYSE:C) downgrading of multiple banking stocks. There were, however, a couple notable M&A moves. Ingersoll-Rand (IR, -11.4%) agreed to purchase Trane (TT, +21.6%) for $10.1 billion (full story). National Oilwell Varco (NOV, -8.6%) will acquire Grant Prideco (GRP, +13.6%) for cash and stock totaling $7.5 billion (full story). The U.S. 10-year Treasury was up 23/32 in price, pushing yields down to 4.15%.

All sectors ended in the red, with energies (-2.5%), tech (-2.2%), and basic materials (-3.5%) showing the most weakness. Crude fell $0.64 to $90.63/barrel. Bond insurance companies MBIA (MBI, +3.4%) and Ambac Financial Group (ABK, +16.9%) were up after Moody's decided to keep their triple-A ratings steady. United Rental (URI, +3.0%) delayed its trial with private equity company Cerberus one day to see if a last-minute settlement could be reached (full story).

Housing Starts (8:30 AM) and State Street Investor Confidence Index (10:00 AM) will be released Tuesday. Watch out for Best Buy's (NYSE:BBY) and Goldman Sach's (NYSE:GS) earnings among others.

Sources:, Yahoo Finance
Additional Reading: Earnings For Tuesday

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