NEW YORK: Stocks fell in Monday trading, sending the Standard & Poor’s 500 Index to a nine-week low, after Chinese equities entered a bear market amid concern a cash crunch will hurt growth and as investors weighed the impact of a possible reduction in the Federal Reserve’s monetary stimulus.
Bank of America Corp. and Citigroup Inc. slid 3.1 percent as banks led losses. Apple Inc. fell 2.7 percent after Jefferies & Co. lowered the stock’s price target amid a glut of unsold iPhones. Allergan Inc. tumbled 12 percent amid analyst downgrades. Vanguard Health Systems Inc. surged 67 percent after agreeing to be bought by Tenet Healthcare Corp. for about $1.8 billion.
The S&P 500 fell 1.2 percent to 1,573.09, the lowest since April 22. The Dow Jones industrial average slipped 139.84 points, or 0.9 percent, to 14,659.56.
Chinese equities entered a bear market as the CSI 300 Index of China’s biggest companies tumbled 6.3 percent, the most since August 2009. The plunge took its loss from this year’s peak to more than 20 percent. China’s benchmark money-market rates last week climbed to a record as the central bank refrained from using open-market operations to ease a cash squeeze. The 10-year U.S. Treasury note was little changed after yields earlier spiked to 2.66 percent, the highest since 2011.
“Investors have been shaken by the concept of rising interest rates and a reduction in stimulus from the Federal Reserve, coupled with the uncertainty regarding effectively how robust the Chinese central banking system is,” said Ethan Anderson of Rehmann Financial in Grand Rapids, Mich.
The S&P 500 has fallen 5.8 percent since a record on May 21. Cliffs Natural Resources Inc., the Cleveland-based largest U.S. iron-ore producer, declined 7.6 percent to $15.88.