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US: Tech shares, airlines lead US stocks lower
[NEW YORK] US stocks dropped on Monday, as the week kicked off with especially large declines in technology shares and airline stocks.
The Dow Jones Industrial Average lost 82.91 points (0.46 per cent) at 17,766.55.
The broad-based S&P 500 shed 13.55 (0.65 per cent) to 2,079.28, while the tech-rich Nasdaq Composite Index fell 46.83 (0.92 per cent) to 5,021.63.
Tech shares like Intel (-1.7 per cent) and Facebook (-1.8 per cent) were hard hit on a day with no major US economic indicators. Airline stocks also fell sharply on worries about overcapacity.
Analysts said the market continued to weigh the implications of Friday's surprisingly good US jobs report, especially for the Federal Reserve's plans for an interest rate hike.
The jobs report "was a game changer that people are still struggling to digest," said Chris Low, chief economist of FTN Financial.
"The Fed was thought to be out of play at least until December and now, the chances are it's going to raise interest rates in September, perhaps as early as July."
Apple fell 0.7 per cent after announcing the launch of "Apple Music," a new subscription service allowing users to stream songs, listen to playlists and connect with performers.
EBay fell 3.8 per cent on concerns about the impact of splitting off its PayPal unit. The company slashed its forecast for 2015 free cash flow from PayPal by US$100 million to US$1.6-$1.8 billion due to higher separation costs, Bloomberg reported.
Airlines tumbled, including American Airlines (-4.5 per cent), Delta Air Lines (-5.0 per cent) and United Continental (-4.4 per cent) due to worries about rising capacity and slow US economic growth. The three major carriers were also downgraded by Raymond James.
Swiss agribusiness Syngenta dropped 1.7 per cent as it rejected for a second time a takeover proposal from Monsanto. The latest Monsanto offer was identical to the first, but contained a US$2 billion breakup fee if the deal was blocked for antitrust reasons.
Syngenta called the breakup fee "paltry" and said the latest offer remained inadequate. Monsanto advanced 0.1 per cent.
Bond prices were mixed. The yield on the 10-year US Treasury fell to 2.38 per cent from 2.41 per cent, while the 30-year US Treasury held steady at 3.11 per cent. Bond prices and yields move inversely.