NEW YORK (TheStreet) -- U.S. stock markets were trading lower on Monday, after China's finance minister dampened stimulus hopes and U.S. home sales unexpectedly declined in August.
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China's slowing industrial momentum, along with rising fears about leverage in the Chinese economy, was behind a broad slump in the global markets Monday. Lou Jiwei, China's Finance Minister, reportedly said his government has no plans to change its current policy just because recent data has been weak.
Banyan Partners' chief market strategist Robert Pavlik said although the S&P 500 is up about 8.8% for the year, the market hasn't yet reached a top. In the short term, there's still more room to run, given that many investor uncertainties have been alleviated. Such uncertainties include soft, historical trading patterns for September, geopolitical issues, the Federal Reserve'smedium-term policy outlook, and selling associated with investors freeing up cash for the Alibaba IPO, Pavlik said.
Existing U.S. home sales for August fell 1.8% on a seasonally adjusted rate to 5.05 million units vs. the 0.8% gain economists expected. The decline halted four straight months of gains.
In other top corporate headlines on Monday, Germany's Merck said it will acquire Sigma-Aldrich (SIAL) for $17 billion in cash. Merck said the combined companies will be able to serve life science customers in a supply chain that can support the delivery of more than 300,000 products to life science customers around the world. Sigma-Aldrich shares surged 33.34% in early afternoon trading.
Shares of Yahoo! (YHOO) fell 6.25% after two research firms downgraded the stock following Friday's initial public offering of China's Alibaba (BABA) - Get Alibaba Group Holding Ltd. Sponsored ADR Report , in which the U.S. company owned a 23% stake.
Auxilium Pharmaceuticals (AUXL) said Endo International's (ENDP) - Get Endo International Plc Report $2.2 billion bid "significantly undervalues" Auxilium and is not a superior proposal under the terms of its existing merger agreement with QLT Inc. Auxilium were down 0.71%.
-- By Andrea Tse and Kurumi Fukushima in New York