In early afternoon trading Monday, the Dow gave back 125 points, the Standard & Poor's 500 Index shed 14, and the Nasdaq lost 38.
The pullback came on the heels of strong gains in January in which the Dow added 5.9%, marking the index's best performance for the first month of a year since 1994.
Most analysts remain bullish and aren't worried by Monday's declines, saying stocks were due for a temporary retraction and some profit-taking was in order.
"We should get a pullback. Markets have been on a tear and they have been on a tear for good, sound economic and earnings-driven reasons," Peter Kenny, managing director at Knight Capital in Jersey City, NJ told Reuters.
What Fueled a Stock Market Pullback
Fueling the declines was an uninspiring factory orders report.
The Commerce Department reported new orders for manufactured goods rose a less than projected 1.8% in December. Economists were looking for a 2.4% increase.
Also weighing on equities here and abroad was renewed political uncertainty in Europe. Spain's Prime Minister Mariano Rajoy faces calls to resign amid a corruption scandal in which he maintains innocence.
"The prospect of Rajoy's resignation has roiled the markets. Any fresh political instability in (the) Eurozone's most important periphery economy could undermine the sense of investor confidence and send Spanish yields higher, making it more difficult for the government to implement its austerity measures," Boris Schlossberg, managing director of FX strategy at BK Asset Management, said to Reuters.
The Big Movers in the Stock Market Today
The earnings parade continued Monday, with much more news igniting action in equities.
Royal Caribbean Cruises Ltd. (NYSE: RCL) sank 4% after reporting a fourth quarter loss. While the company sees demand improving in North American this year, Europe will still be a drag.
Shares of Gannett Co. Inc. (NYSE: GCI) fell into the red by more than 5% after earnings of the publisher of USA Today rose in Q4, but were held back by restructuring costs.
Dell Inc. (Nasdaq: DELL) inched down 3%, falling with the overall market, in spite of speculation that company could be taken private as early as this week. Tech heavyweight Microsoft Corp. (Nasdaq: MSFT) has been rumored to be providing financial assistance in the deal.
There was no celebration surrounding shares of social networking leader Facebook Inc. (Nasdaq: FB) as it marked the ninth anniversary since its inception. A report in Barron's over the weekend that said FB shares are probably worth no more than $25 at best wasn't the kind of anniversary present the company would have liked. Shares of the Menlo Park, CA-based company slumped more than 4% Monday.
Herbalife Ltd. (NYSE: HLF) shares lost some life after the New York Post reported the company is under investigation by the Federal Trade Commission. According to one of the 188 complaints filed with the FTC, a claimant from Durango, IA believes Herbalife should provide a refund of hundreds of dollars in payments to customers and distributors.
Shares of the direct selling marketer have been in the spotlight since December, when hedge fund manager William Ackman revealed a large short position in the stock and labeled the business a pyramid scheme.
Herbalife shares garnered further attention when Ackman and activist investor Carl Icahn had a heated row on CNBC over the company, their respective positions and motives in Herbalife.
Research in Motion's motive for changing its name to BlackBerry Inc. (Nasdaq: BBRY), is clear: It better represents the company behind the iconic smartphones. The name change was worth better than 13% to BlackBerry on Monday.
The company launched its new BB10 last week amid much fanfare. Shares of the Canadian-based company ran up in anticipation of the launch, then fell after it was reported the phone won't be available to U.S. BlackBerry fans until March. The keyboard version will be delayed even longer.
In commodities, oil fell $1.57 to $96.20 a barrel. Gold was up $7 to $1,678 and silver was flat at $31.96
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