Wall Street Walloped

Stocks plunge as profit-takers have their way. Crude oil prices and Treasuries are higher.
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Updated from 4:07 p.m. EST

Stocks had their worst session in months on Monday as soft sales at

Wal-Mart

(WMT) - Get Report

and a continuing climb in oil prices helped spur intense profit-taking to start the week.

The

Dow Jones Industrial Average

dropped 158.38 points, or 1.29%, to 12,121.79. It was the Dow's worst single-day point loss since July 13.

Of the index's 30 components, 27 finished lower, including declines of 2.7% in

Boeing

(BA) - Get Report

,

General Motors

(GM) - Get Report

and Wal-Mart.

Both the

S&P 500

and the

Nasdaq Composite

notched their biggest point losses since early June. The S&P 500 fell 19 points, or 1.36%, to 1381.95, and the Nasdaq gave up 54.34 points, or 2.21%, to 2405.92, pressured by a 5.4% retreat in

XM Satellite Radio

(XMSR)

and a 4% pullback in

Google

(GOOG) - Get Report

.

Michael Sheldon, chief market strategist with Spencer Clarke LLC, said that the large decline is "a tough start to the week as investors take profits. Remember that today has historically been a down one for equity markets following the Thanksgiving holiday. Today is no different."

About 2.71 billion shares changed hands on the

New York Stock Exchange

, and volume on the Nasdaq was roughly 1.98 billion shares. Losers outpaced advancers 4 to 1.

By sector, stocks related to precious metals were among the few winners. The Philadelphia Gold & Silver Index rose 0.5%, and the Amex Gold Bugs Index was up 0.1%. Tech stocks were among the hardest hit. The Philadelphia Semiconductor Sector Index lost 2.3%, the Nasdaq Computer Index fell 2.5%, and the Amex Computer Technology Index was down 2.5%.

The drop was a continuation of the pullback that ended last week, when rising oil prices and a big decline in the value of the dollar weighed on the major indices. On Friday, the Dow fell 46.78 points, or 0.38%, to 12,280.17, pressured by a selloff in

Home Depot

(HD) - Get Report

.

During the same session, the S&P 500 dropped 5.14 points to 1400.95, and the Nasdaq was lower by 5.72 points to 2460.26.

The dollar continued its decline against the euro and the yen. As for Treasuries, the benchmark 10-year note was up 5/32 in price to yield 4.54%, and the 30-year bond was higher by 8/32 and yielding 4.62%.

"A weaker dollar, as a proxy of economic growth in the U.S., is a short-term negative," said Marc Pado, market strategist with Cantor Fitzgerald. "This translated into strength for crude, gold and other commodities. We need to see if

traders perceive the current dollar level as a buying opportunity, or if they jump on the bandwagon and pound the dollar further."

Even though the holiday shopping rush has just begun, retail stocks will be worth watching in the coming days as traders try to determine whether they can make any bets on chain-store winners and losers.

According to a national survey of mall-based stores, retail sales on Black Friday rose 6% from a year ago to $8.96 billion. The world's biggest retailer, Wal-Mart, said over the weekend that its same-store sales in November are set to slip 0.1%. Wal-Mart shed $1.29 to $46.61.

"Even though Wal-Mart didn't keep pace, we see that as the exception to the rule," said Pado. "When all is said and done, estimates for this week are for $28 billion in sales. We'll see if these good numbers have been fully discounted into current prices."

Staying with the sector, Banc of America Securities upgraded

Lowe's

(LOW) - Get Report

to buy from neutral, assigning the home-improvement retailer a $43 stock price target. The firm cited valuation for its upgrade. Lowe's climbed 40 cents, or 1.3%, to close at $30.40.

Meanwhile, rival Home Depot saw Banc of America raise its stock price target to $45 from $42. The stock gave back 13 cents, or 0.3%, at $37.59.

Hotel operators were lower after A.G. Edwards downgraded

Starwood Hotels

(HOT)

,

Hilton Hotels

(HLT) - Get Report

and

Marriott

(MAR) - Get Report

from buy to hold.

Starwood finished down 2.9%, Hilton lost 5%, and Marriott fell by 3.3%.

Elsewhere,

Swift Transportation

(SWFT)

rejected a buyout offer from its largest shareholder, and

ING

(ING) - Get Report

said it will sell its Degussa Bank operation to a group of investors.

Underpinning the last session's losses in the stock market were rising crude prices, and the January futures contract continued that trend. Oil futures gained $1.08 to close at $60.32 on the Nymex. Other energy prices were higher as well.

Precious metals were stronger. Gold ended up $11.60 to finish at $640.60 an ounce and silver surged 45 cents to $13.49 an ounce.

Overseas, European markets also fell hard. London's FTSE 100 gave back 1.2% to 6050, and Frankfurt's Xetra DAX dropped 1.8% to 6298. Asia's markets finished mixed overnight, as the Nikkei rose 1% at 15,885 and the Hang Seng dipped 0.3% to 19,204.