With investors cashing in their gains heading into the end of the year, blue chip stocks suffered their worse one-day drop in a month
The Dow Jones Industrial Average at one point fell as much as 134 points, before paring losses. But it still closed below 16,000, falling 94.1 points, or 0.6% to end at 15,914.6.
The Walt Disney Company (DIS) weighed on the index after B. Riley cut its rating on the company, calling it "fairly expensive." The shares fell 1.4% to close at $69.60
The S&P 500 index dropped 5.7 points, or 0.3%, to 1,795.15. The Nasdaq Composite slipped eight points, or 0.2%, to 4,037.2.
Last week ended with the S&P 500 posting its longest string of weekly advances in almost a decade. As a result, investors are worried the market has become overbought.
Meanwhile, taper talk continues to weigh on investor sentiment, fueling the third straight session of losses for U.S. stocks. On Monday, stronger-than-expected data on manufacturing and construction spending on underscored views the Federal Reserve may soon begin scaling the $85 billion-a-month bond-buying program credited by may for fueling the 2013 stock market rally.
To be sure, the central bank will begin to trim the stimulus at some point, though the timing remains in question. Many analysts still forecast the announcement will take place in March 2014.
The Fed has maintained it would begin to slow the program when certain economic measures meet its targets. Investors are focused on Friday's jobs report from the Labor Department for suggestions regarding what action the Fed may take and when.
The yield on the 10-year Treasury note eased to 2.78% from an 11-week high of 2.801% late Monday.
In Europe, the Stoxx Europe 600 slid 1.5%, while Germany’s DAX 30 index dropped 1.9%. The U.K.’s FTSE 100 lost 1% and France’s CAC 40 shed 2.6%.
In Asia, Japan’s Nikkei Stock Average rose 0.6%. China’s Shanghai Composite erased early losses to close up 0.7%.
December gold futures were little changed at $1,221.70 an ounce.
January crude-oil futures climbed 2.4%, the biggest one-day climb in more than two months, to settle at $96.04 a barrel. That put pressure on automobile makers, including General Motors (GM) and Ford (F).
In currency markets, the dollar slipped against the euro and the yen.
In corporate news, Apple (AAPL) rose 2.7% to close at $566.32 after an analyst at UBS upgraded the stock to a Buy and raised the price target to $650.
Tesla Motors (TSLA) soared 16.5% to close at $144.70 after a note from Morgan Stanley declared the car maker a buying opportunity.
Arch Coal (ACI) climbed 1.7% to close at $4.26 after announcing measures to refinance debt. And drug maker AbbVie (ABBV) rose 3.2% after Goldman Sachs added the stock to its Conviction Buy list.
Yum Brands (YUM) fell 2.7% to end at $75.61 after it reported disappointing sales figures in China. Krispy Kreme Doughnuts (KKD) plunged 20% to close at $19.59 after the company made muted comments about earnings for the upcoming year.
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