NEW YORK – Stocks fell Monday amid fresh concerns about higher prices, after steep declines in biotechnology shares and a brokerage downgrade on carmakers.
The Dow Jones industrial average (search) ended down 75.37 points, or 0.70 percent, at 10,766.23. The Standard & Poor's 500 Index (search) was down 7.77 points, or 0.64 percent, at 1,203.60. The Nasdaq Composite Index (search) was down 13.68 points, or 0.66 percent, at 2,051.72.
For the month, the Dow ended up 2.6 percent, the S&P 500 advanced 1.9 percent and the Nasdaq slipped 0.5 percent.
Irish drug maker Elan Corp. Plc (ELN) tumbled 70 percent and Biogen Idec (BIIB) slumped 43 percent after the companies suspended sales of their new multiple sclerosis drug Tysabri. They acted after a patient died from a rare and often fatal central nervous system disease.
"Considering the disaster in the biotech sector after the news from Elan and Biogen, the performance of the market can be termed respectable. Most people are in shock from the news. It could be a wake up call to a lot of people who think that the market is without risk," said Elliot Spar, market strategist with Ryan Beck & Co.
Monday's sell-off follows a three-day rally last week which saw blue chips hit highs for 2005 on Friday. However, stocks closed off their session lows, which some put down to month-end buying -- known as window dressing -- when money managers buy shares to boost their portfolio.
"When you have the (Standard & Poor's 500 index) up three days in a row like we had last week, you'll definitely see some money coming off the table," said Neil Massa, equity trader at John Hancock Funds. "It's a broad selloff here, not just one sector, and the money's not being put to use anywhere. So I think folks are just waiting for later in the week."
Another negative for stocks was an increase in geopolitical tension. A suicide bomber killed 125 people and wounded 130 south of Baghdad -- the single bloodiest attack in Iraq since the fall of Saddam Hussein. Lebanon's Syrian-backed government collapsed, piling more pressure on Damascus, already under fire from the United States and Israel.
Rising oil prices were also a concern, as a barrel of light crude settled at $51.75, up 26 cents, on the New York Mercantile Exchange. The confluence of news, along with nervousness about a raft of important economic data due later in the week, triggered the slide.
Biogen fell $28.63 to $38.65 while Elan tumbled $18.90 to $8. Shares of Teva Pharmaceutical Industries Ltd. (TEVA), which makes a rival multiple sclerosis drug, rose 8 percent to $29.85.
The sector also was roiled as Mylan Laboratories Inc. (MYL) and King Pharmaceuticals Inc. (KG) called off their proposed merger after failing to reach a revised agreement. Mylan rose 66 cents to $17.60, while King was off 76 cents at $9.49.
Department store chain Federated Department Stores Inc. (FD) lost 34 cents to $56.45 after it finalized an $11 billion takeover agreement for May Department Stores Co. MAY) over the weekend. The combined company would be the largest department store company in the nation. May slipped 82 cents to $34.53.
Trucking firm USF Corp. (USFCsurged $8.98, or 23.1 percent, to $47.80 after it agreed to be bought by larger rival Yellow Roadway Corp. (YELL) for $1.47 billion in cash and stock. The deal is expected to close by summer. Yellow was down $3.56 at $57.75 on the news.
Analysts at Banc of America Securities downgraded General Motors (GM) and rival Ford Motor Co. (F) to "sell" from "neutral," saying that both U.S. automakers would continue to lose market share to their European and Japanese rivals. GM, a Dow component, slid $1.23 to $35.66 and Ford lost 35 cents to $12.65.
Wall Street was disappointed with the Commerce Department's (search) latest reading on consumer income and spending. Personal income fell less than expected in January, but spending was flat and core consumer prices rose 0.3 percent — the fastest rate in more than three years.
The Russell 2000 index of smaller companies was down 3.47, or 0.54 percent, at 634.06.
Overseas, Japan's Nikkei stock average rose 0.71 percent. In Europe, Britain's FTSE 100 closed down 0.76 percent, France's CAC-40 fell 0.18 percent for the session, and Germany's DAX index gained 0.04 percent.
Reuters and the Associated Press contributed to this report.
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