S&P Drops Most in 5 Months as Boston Explosion Heightens Market Concerns

NEW YORK ( TheStreet) -- The S&P 500 suffered its largest loss in five months as two explosions at the finish line of the Boston Marathon left dozens injured. The blasts occurred before the close of trading, with global commodity prices already pressured by a less-than-expected rise in Chinese growth.

The S&P 500 fell 2.3% to 1,552.36, the most since Nov. 7, as police and emergency crews labored to rescue victims of the tragedy.

Boston Police Commissioner Edward F. Davis said simultaneous explosions occurred around 2:50 p.m. ET within 50 and 100 yards of each other, causing multiple casualties. Davis wouldn't confirm a number for casualties, but other media reports have suggested that as many as 12 people died in the blasts.

Earlier in the trading session, reports came that China, the world's second-largest economy, grew 7.7% in the first quarter, trailing economist projections. China's economy expanded 7.9% in the fourth quarter. Economists were expecting an increase in the first quarter of 8%, according to a Reuters poll.

"The explosions at the Boston Marathon pretty much added to the negative sentiment because it's such an uncertainty," said Sam Stovall, S&P's New York-based chief equity strategist. "First off, it's a tragedy, you feel for the people who were there . . . the next question is could there be more things there or elsewhere, and those kind of worries are very very hard to factor in to equity prices."

According to ABC, Massachusetts General Hospital had received at least 4 patients from the explosion. There are various reports of several people having lost limbs during the explosion, though nothing is confirmed at this time. Reports of the casualty count are varying as information is being released and updated. Boston Police is tweeting that two people have died, while 22 are injured.

The The Associated Press is reporting that two additional explosive devices were found, but are now being disarmed. The Boston Marathon headquarters is on lockdown, according to reports.

The explosions took place as global markets were already down on reports showing that industrial output in China, the world's second-largest economy, had missed expectations, prompting an early-morning sell-off in commodities. June gold futures plummeted $140.30 to settle at $1,361.10 an ounce, and mining stocks were hit especially hard. Freeport-McMoRan Copper & Gold ( FCX) tumbling 8.3% and Rio Tinto ( RIO) slumping 5.9%.

May crude oil futures shed $2.58 to close at $88.71 a barrel on the New York Mercantile Exchange. The Hong Kong Hang Seng index dropped 1.43% and Nikkei 225 in Japan gave up 1.55%. The FTSE 100 in the U.K. was fell 0.64% and the DAX in Germany fell off 0.41%.

U.S. first-quarter earnings news had begun on an encouraging note Monday with Citigroup ( C) rising as much as 3.4% after the bank reported a solid first quarter for fixed income and equity trading.

Yet investor caution rose as the New York Federal Reserve reported that New York manufacturing activity in April had weakened as a general business conditions index fell six points to 3.1 even as it remained positive for a third straight month. Economists surveyed by Reuters were predicting a reading of 7.

Additionally, the National Association of Home Builders said Monday that rising costs for building materials and growing concerns about the supply of developed lots and labor led to less confidence among home builders in the market for newly built, single-family homes in April, with the National Association of Home Builders/Wells Fargo Housing Market Index showing a two-point drop to 42 vs. the consensus expectation of 45.

The Dow Jones Industrial Average declined 1.8% to 14,599.20 while the Nasdaq dropped 2.4% to 3,216.49.

The benchmark 10-year Treasury rose 12/32 to dilute the yield to 1.688%. The dollar was rising 0.21% to $82.29 according to the U.S. dollar index.

The trading day was punctuated by two high-profile acquisitions.

Thermo Fisher Scientific ( TMO), the lab equipment giant located in the Boston suburb of Waltham, gained as much as 6.2% after announcing a deal to acquire genetic testing equipment maker Life Technologies ( LIFE) for $76 a share in cash or about $13.6 billion, making the deal one of the largest corporate takeovers of the year.

By day's end, Thermo Fisher was down 1.3% to $78.58. Life Technologies gained 7.5% to $73.11.

Sprint Nextel ( S), the country's third-largest mobile phone operator, surged 14% to $7.06 after satellite-TV provider Dish Network ( DISH) offered to acquire the U.S. wireless carrier for $25.5 billion in cash and stock. The buyout offer could frustrate Japanese carrier Softbank's efforts to buy Sprint, or create a bidding war that might benefit investors. Dish fell 2.3% to $36.77.

The longer-term impact of the Boston explosions remained unclear. The apparent attack took place on a day when investors were already digesting reports indicating that all is not well in the global economy despite the S&P 500's 11.4% advance for 2013 before Monday.

Global market reaction in the days ahead is more likely to be a product of investor sentiment about the strength or weakness of the world economy than the events in Boston, said Michael Shaoul, chairman of New York-based Marketfield Asset Management LLC. The 2004 Madrid commuter train and 2005 London subway terrorist attacks occurred at a time when the global economy was largely stable, he said, and markets rebounded shortly after both of those incidents.

"If we're looking at what happened today through a simple financial prism, it isn't likely to be a determinant of where any of the major market prices are going to be in the week's ahead,'' Shaoul said in a phone interview. "Yet gold collapsed on a day in which you had poor Chinese data, so it's possible that this adds to an already unfolding story. Conversely, Madrid and London were really bad terrorist attacks in the middle of reasonable economies, so markets recovered. It's unclear exactly how things will play out."

Written by Joe Deaux and Leon Lazaroff in New York

>To contact the writer of this article, click here: Andrea Tse.

More from Markets

U.S. Drillers at Mercy of Iran, Saudi Production Spat as OPEC Meeting Begins

U.S. Drillers at Mercy of Iran, Saudi Production Spat as OPEC Meeting Begins

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks

Comcast's Brian Roberts vs. Disney's Bob Iger: Which Titan Will Nab Fox?

Comcast's Brian Roberts vs. Disney's Bob Iger: Which Titan Will Nab Fox?

Online Retailers Hit by Supreme Court Ruling Requiring Sales Tax Collection

Online Retailers Hit by Supreme Court Ruling Requiring Sales Tax Collection

Dow Logs Eighth Straight Drop as Stocks Slump

Dow Logs Eighth Straight Drop as Stocks Slump