Updated from 4:06 p.m. EDTTalk of a weaker dollar policy made for grim stock trading on Monday. After Treasury Secretary John Snow indicated he wouldn't support the "strong dollar" policies of his predecessors, the Dow Jones Industrial Average, which had rallied 7.5% since April 1, dropped 185 points, or 2.1%, to 8493. The Nasdaq, which had rallied 14% over the same span, fell 45 points, or 3%, to 1492, while the S&P 500 lost 23 points, or 2.5%, to 920. The dollar fell to its lowest level against the euro since January 1999 after Snow said over the weekend in Europe that the government won't determine the dollar's strength by its value against other currencies, but will instead use other measures, such as public confidence and anti-counterfeiting measures. The euro was up sharply at $1.1685. Market watchers said profit-taking following the recent stock market rally also was taking a toll on stocks. "The weak dollar is the excuse du jour. You've got a four-year low for the dollar at the same time the stock market is at 11-month highs," said Ken Tower, chief market strategist for CyberTrader. "This is just part of the topping process." Markets were ignoring better-than-expected economic data, with the Conference Board's index of leading economic indicators showing a gain of 0.1% for April, better than the consensus estimate of zero growth and March's slide of 0.2%. In industry-moving news, the Supreme Court has approved a program from the state of Maine that would require drugmakers to reduce prescription drug prices. While the high court warned that Maine's program might not hold up to future legal challenges, the news triggered a selloff in pharmaceutical names. The Amex drugmakers index slid 4.4%. Among corporate news, bankrupt phone company WorldCom ( MCWEQ), which now calls itself MCI, is reportedly in talks with the Securities and Exchange Commission to pay more than $400 million to settle charges related to accounting fraud.
On the medical front, Genentech ( DNA) jumped 44.7% to $54.85, after announcing its experimental cancer drug Avastin caused a marked improvement in the survival of colon cancer patients. Shares in Protein Design Labs ( PDLI), which would receive a 3% cut of worldwide sales, rose 18.4% to $13.80. Many retailers were releasing earnings, including Lowe's ( LOW), which posted higher first-quarter earnings amid an expansion into large U.S. cities, but missed revenue estimates. Shares in Lowe's fell 9% to $40.30. Elsewhere, Toys 'R' Us ( TOY) reported first-quarter losses that topped analysts' consensus and affirmed guidance for 2004. Mall staple The Limited ( LTD) announced earnings that beat by a penny a share. The company also affirmed second-quarter guidance. Toys 'R' Us dropped 6.6% to $11.12, while The Limited fell 3.5% to $13.08. Also, Campbell Soup ( CPB) announced earnings that blew away analyst estimates for both earnings and revenue. The company said full-year earnings would top expectations. Shares gained 7% to $22.95. On the technology front, Microsoft ( MSFT) shares fell 3% to $24.80, after the sofware giant said it will license the rights to Unix technology from SCO Group ( SCOX), a move that could spark similar licensing deals in the industry. SCO Group rose 43.2% to $6.80. Roxio ( ROXI) shares jumped 17.3% to $8.09, after the company announced it will buy all the rights of Pressplay, the joint online music venture from Vivendi Universal and Sony Entertainment, in a deal the company valued at $52 million. Sun Microsystems ( SUNW) shares dropped 3.7% to $4.14 after The New York Times reported that the company is the subject of takeover speculation. Meanwhile, Qualcomm ( QCOM) affirmed third-quarter and full-year guidance, but shares slipped 0.1% to $30.27 as part of the broader market selloff. A federal probe into drugmaker Bristol-Myers Squibb's ( BMY) financial statements is reported to be much more comprehensive than the company initially revealed, according to The New York Times. Shares fell 5.3% to $24.45.
Treasuries were down, with the yield on the 10-year note up 2 basis points at 3.42%. Crude oil prices were practically unchanged. Overseas markets were lower, with London's FTSE 100 closing down 2.7% at 3941 and Germany's Xetra DAX closing down 4.6% at 2851. In Asia, Japan's Nikkei closed lower by 1%, at 8039, while Hong Kong's Hang Seng ended unchanged at 9087. On Friday, the Dow closed down 0.4% at 8678. The S&P 500 lost 0.3% to 944, while the Nasdaq fell 0.8% to 1538.