Updated from 3:19 p.m. EDT
Blue-chip stocks slid Monday as banks and commodity-related companies lost ground, while tech shares were only fractionally lower thanks to a sharp rally in
Dow Jones Industrial Average
finished down 155.88 points, or 1.8%, to 8418.77.
was the largest decliner.
was down 8.3%,
Bank of America
declined 7.9%, and
gave back 3.4%.
slid 19.99 points, or 2.2%, to 909.24. The
, meanwhile, dipped only 7.76 points, or 0.5%, to 1731.24, owing to a 17% surge in Dish Network shares.
Dish Network reported first-quarter results
Monday, saying profit rose 21% as revenue climbed, partly on equipment sales, handily beating the Thomson Reuters average estimate. Revenue grew 2.1% from a year ago to $2.91 billion to meet analysts' estimates, even as the company lost about 94,000 net subscribers during the quarter.
"It really was a boring day," said Paul Mendelsohn, chief investment strategist with Windham Financial. "We were due for a pullback. Look how much we've come up and look where we were sitting at Friday's close. We're right below the 200-day moving average and just below the January peak. This was a very natural place for it to stop."
Selling accelerated in the last 30 minutes of trading after Meredith Whitney of the Meredith Whitney Advisory Group told
she would stay away from financials because earnings are going to be "far below consensus" through 2011. Whitney also recommended shorting retail and consumer discretionary stocks.
"Meredith Whitney probably told the truth, but I'm not sure the market recognizes that scenario is the way it's going to play out," said Mendelsohn.
Financials were in the red for most of the session, though. A number of bank stocks retraced some of last week's gains after four companies announced plans for common stock offerings in order to pay back funds borrowed from the government's Troubled Asset Relief Program.
Capital One Financial
each announced stock sales ahead of Monday's opening bell.
All of those stocks, which rallied Friday on the results of the stress tests, finished significantly lower. Capital One tumbled 13.5%, U.S. Bancorp and KeyCorp each lost 9.9%, and BB&T was down 7.6%.
also announced its own common stock offering of 42.3 million shares, good for about $1 billion. The company, which did not borrow TARP funds, will use the proceeds for general corporate purposes. Principal shares dropped 14.1% to $20.34.
Tuesday will be a tell-tale day, according to Mendelsohn, if the market continues to pull back. "Tomorrow really becomes key. We need to see some buying come back in," he said. "If we only see sellers and we don't see buyers on the dip, tomorrow could signal a bigger problem than we saw today. Tomorrow is critical. You don't want to give up another 150 points. Even a flat day is still a win."
Commodity stocks were hit Monday as crude, natural gas, gold, silver and copper prices were falling. Oil finished lower by 13 cents to $58.50 a barrel, and natural gas lost 2 cents to $4.29 per million British thermal units. Gold declined $1.40 to $913.50 an ounce, and copper was off 6 cents to $2.08 a pound.
Among individual stocks in the news, reports say GM will completely revamp its board of directors. The
to help find replacements for at least half of its 12 directors, according to a report in
The Wall Street Journal
, citing people close to the situation.
The report went on to say the U.S. government is expected to name a small portion of the directors, and the United Auto Workers union, which has been offered 39% of GM in exchange for health-care concessions, will likely get to pick at least one GM board member in the future.
Those reports came ahead of a press conference by CEO Fritz Henderson, who said bankruptcy has become
, even though it isn't a certainty. GM dropped 10.6% to close at $1.44.
will reportedly receive a hefty fine from the European Union when it holds its weekly meeting of commissioners Wednesday, after
Advanced Micro Devices
alleged that Intel kept AMD out of the microprocessor market.
The Financial Times
to keep their usage of AMD chips down and by selling chips below cost to thwart AMD from taking key accounts. Shares of Intel finished higher by 0.5% at $15.37.
Bonds rallied in the absence of any economic data to start the week. The 10-year Treasury note rose 1-1/32 in price to lower the yield to 3.17%, and the 30-year bond gained 1-19/32 to yield 4.17%. The dollar was lower against the yen and increasing against the euro.
"While corporate yields have come down as equity markets improved, the key for the future may be found in Treasury yields in the months ahead," said Paul Nolte, director of investments with Hinsdale Associates, in a note to clients. "The impact may be felt in the mortgage market as rates have begun to inch up there as well and could impede any nascent recovery in housing."