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US: Stocks snap record-setting rally


[NEW YORK] US stocks snapped on Monday a three-day rally to record highs as investors awaited Apple earnings results and a Federal Reserve policy meeting.

The Dow Jones Industrial Average dropped 42.17 points (0.23 per cent) to 18,037.97.

The Standard & Poor's 500-stock index retreated 8.77 (0.41 per cent) to 2,108.92, while the tech-rich Nasdaq Composite Index fell 31.84 (0.63 per cent) to 5,060.25.

Both the S&P and Nasdaq had built on record closes Friday as markets opened higher, but Wall Street was unable to maintain the momentum.

Apple bounced up 1.8 per cent ahead of its first earnings report as a member of the blue-chip Dow. The tech giant is to report fiscal second-quarter earnings after the markets close.

Apple has beaten profit estimates for the past eight quarters, noted John Plassard of Mirabaud Securities.

Investors also awaited the outcome of a two-day meeting of the Federal Open Market Committee, the Fed's policy arm, on Wednesday for signs of the timing of an interest rate increase, expected this year.

Biotech shares slid after Mylan rejected Teva Pharmaceutical's US$40.1 billion hostile takeover bid, saying the Israeli firm undervalued the company and the proposed combination "carries significant antitrust risk".

Mylan sank 5.7 per cent and Teva dropped 4.3 per cent. Amgen lost 3.4 per cent, Biogen loset 3.1 per cent and Gilead Sciences slipped 0.7 per cent.

Applied Materials dived 8.4 per cent after it agreed with Tokyo Electric to abandon their nearly US$10 billion merger agreement, citing opposition from the US Justice Department on antitrust grounds.

The announcement came after Comcast and Time Warner Cable said on Friday they had scrapped their US$45 billion merger plans, also due to US anti-trust concerns.

Time Warner Cable gained 0.7 per cent on speculation that it may be in the sights of Charter Communications; Charter slid 1.5 per cent.

IGATE added 3.3 per cent at US$47.36 after French IT company Capgemini said it was buying the US rival for US$4 billion in a cash-and-stock deal that offered US$48 per share, a five percent premium to IGATE stock's close on Friday.

Tesla Motors jumped 6.0 per cent. The electric-car maker is expected to make an announcement about storage batteries Thursday.

Bond prices were mixed. The yield on the 10-year US Treasury rose to 1.93 per cent from 1.92 per cent on Friday, while the 30-year rose fell to 2.61 per cent from 2.62 per cent. Bond prices and yields move inversely.