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US: Stocks drop on Greece default fears
[NEW YORK] US stocks dropped on Monday as worry about a Greek debt default more than offset a positive reaction to big deals in the pharmaceuticals and homebuilder sectors.
The Dow Jones Industrial Average fell 107.67 points (0.60 per cent) to 17,791.17.
The broad-based S&P 500 fell 9.68 (0.46 per cent) to 2,084.43, while the tech-rich Nasdaq Composite Index fell 21.13 (0.42 per cent) to 5,029.97.
European stocks fell sharply after weekend talks between Greece and creditors collapsed. US stocks were in the red all day as well, although the S&P 500 finished well above its session low of 2,072.49.
Homebuilders Ryland Group and Standard Pacific surged on news they are combining to create a company with a market capitalization of US$5.2 billion and an enterprise value of US$8.2 billion.
Ryland gained 5.2 per cent, while Standard Pacific tacked on 5.6 per cent.
Target rose 1.2 per cent on news it will sell its pharmacy and clinic business for about US$1.9 billion to CVS Health. CVS Health will acquire more than 1,660 pharmacies operating inside Target stores, and will expand its MinuteClinic chain in Target as well. CVS Health gained 0.4 per cent.
Health insurer Cigna vaulted 11.7 per cent higher after the Wall Street Journal reported that larger rival Anthem offered about US$45 billion to buy it. Cigna has so far rebuffed the overture, apparently over who would runt he combined company. Anthem added 2.3 per cent.
Aetna, which was also mentioned by the Journal as a potential takeover target, rose 4.4 per cent.
Shares of Dealertrack Technologies, which provides software to auto dealers and lenders, jumped 58.0 per cent higher on news it will be bought by Cox Automotive for US$4 billion. Cox owns Kelley Blue Book and provides marketing and software services to the auto industry and consumers.
Chipmaker Micron Technology shed 3.5 per cent following a downgrade by Morgan Stanley, which said high product inventories are depressing prices, leading to weakness in 2015 and uncertainty for next year.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.36 per cent from 2.39 per cent Friday, while the 30-year dropped to 3.09 per cent from 3.10 per cent. Bond prices and yields move inversely.