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Monday Market Wrap: Stocks Fall Nearly 1% To Start Week


The U.S. stock market kicked off the trading week with a thud on Monday as all three major averages closed the day down nearly 1 percent. Every single sector was red on the session, with the biggest losses coming in healthcare, financials and consumer cyclicals, all down more than 1 percent. Not surprisingly, the best performers were defensive sectors such as utilities and consumer goods, where declines were limited to around 0.30 percent.

Individual equity gainers on Monday included GW Pharmaceuticals PLC (NASDAQ: GWPH), which climbed more than 17 percent on the back of positive Phase 3 data from a clinical trial of its cannabis-based medicine Epidiolex. Chemtura Corp (NYSE: CHMT) shares surged almost 16 percent to start the week in the wake of a buyout agreement.

Losers on the day included Himax Technologies, Inc (NASDAQ: HIMX), which plunged almost 20 percent in the wake of an analyst downgrade, and Accorda Therapeutics Inc (NASDAQ: ACOR), which lost nearly 16 percent after a tribunal affirmed the company's right to redeem shares in Biotie Therapies Corp, which is no longer traded.

Major Averages

The Dow Jones Industrial Average fell 167 points, or 0.91 percent, to 18,095.

The S&P 500 shed a little less than 19 points, or 0.86 percent, to 2,146.

The Nasdaq shed 48 points, or 0.91 percent, to close the session at 5,257.

New Home Sales

New home sales figures from August showed that sales were brisk at 609,000 compared to consensus estimates calling for 585,000 sales in the month. Nevertheless, new home sales did decline from the 659,000 sales in the prior month.


Commodity prices were moderately higher to start the week, with the Bloomberg Commodity Index rising 0.64 percent.

NYMEX crude oil futures climbed nearly 2.50 percent to $45.58 while Brent contracts added 2.29 percent to $46.94. Natural gas futures jumped a little less than 2 percent to $3.01.

Precious metals were slightly lower on Monday. At last check, COMEX gold futures had shed 0.04 percent and were trading at $1,342.10. The SPDR Gold Trust ETF (NYSE: GLD) closed the equity session down 0.08 percent at $127.55. Silver contracts declined 1.56 percent to $19.50. The iShares Silver Trust ETF (NYSE: SLV) lost 1.45 percent to finish at $18.41. Copper futures registered a 0.50 percent decline to start the trading week.

In the grains complex, corn and wheat both traded lower on Monday. Corn futures lost 2.23 percent to $3.2900 per bushel. Wheat contracts fell 2.16 percent to $3.9600.


Treasury prices were strongly higher on Monday as money moved out of the equity market and into bonds. At the close of the equity session, the iShares Barclays 20+ Year Treasury Bond ETF (NASDAQ: TLT) had climbed 0.64 percent to $137.69.

Treasury yields were as follows on Monday afternoon: The yield on the 2-Year Note was 0.76 percent. The 5-Year Note was yielding 1.13 percent. The 10-Year Note was last yielding 1.59 percent while the 30-Year Bond yield was 2.32 percent.


The U.S. Dollar was slightly lower on the session. At the close of equity trading, the PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, was down 0.20 percent to $24.63. The closely watched EUR/USD pair added 0.23 percent to 1.1252 euros.

Volatility and Volume

The CBOE Volatility Index (VIX) surged on the session as market jitters pushed stock prices lower. While the VIX remains at relatively low levels, the so-called "Fear Index" has been rising in recent weeks, including a nearly 18 percent jump on Monday to 14.50.. The 52-week range in the VIX is 11.02 to 32.09.

Overall trading volume on Monday was in line with recent average daily volume. Around 89.7 million SPDR S&P 500 ETF (NYSE: SPY) shares traded hands on the session compared to a 3-month daily average of just under 88 million. Trading in the PowerShares QQQ Trust ETF (NASDAQ: QQQ), which tracks the Nasdaq 100, however, was lighter with just 16 million QQQ shares trading hands versus a 3-month daily average of 22 million.