US stocks declined on Monday, with the Standard & Poor’s 500 Index registering its biggest loss in two months, as mounting negative pre-announcements left a lacklustre profit growth outlook.
The Dow Jones industrial average fell 179 points or 1.09%, to 16,258, the S&P 500 lost 23 points or 1.26%, to 1,819 and the Nasdaq Composite dropped 61 points or 1.47%, to 4,113.
Nearly 10 out of every 11 earnings pre-announcements for the current earnings season from S&P 500 companies have lowered estimates, according to Thomson Reuters data.
Various companies that posted weak earnings or forecasts on Monday, including SodaStream (SODA.O), Lululemon Athletica (LULU.O), Express Inc (EXPR.N) and Aaron's (AAN.N) saw their stocks get hit hard.
Lululemon sank 16.6%, while Express slid 4.6%. Aaron's lost 6.8% and SodaStream plunged 26%.
But Wendy's (WEN.O) outlook was a bright spot, sending shares up 6.4% after the fast-food restaurant chain estimated adjusted quarterly earnings above analysts' expectations.
In deal news, Beam Inc (BEAM.N) agreed to be acquired by Suntory Holdings Ltd for $16 billion, including debt. Shares of Beam jumped 24.6%.
After the closing bell, Google (GOOG.O) agreed to acquire Nest Labs Inc for $3.2 billion in cash. Google shares edged 0.6% higher in after-market trade.
Intercept Pharmaceuticals Inc. plunged 18% after the stock soared six fold last week.
Microsoft decreased 2.9%, while Disney tumbled 2.8% for the largest declines in the Dow industrial average. Nike fell 2.3% and Exxon Mobil Corp. slid 2%.
In Asia, shares declined on Tuesday in morning trade following the biggest drop in US stocks since November amid concern over valuations.
The MSCI Asia Pacific Index lost 1.2% to 139 as of 10:55 a.m. in Tokyo. Japan’s Topix (TPX) index slumped 1.9% as the market reopened following a public holiday. Australia’s S&P/ASX 200 Index fell 1%, while New Zealand’s NZX 50 Index slid 0.7%.
South Korea’s Kospi index lost 0.1%. Singapore’s Straits Times Index dropped 0.4% and Taiwan’s Taiex index declined 0.3%.
Hong Kong’s Hang Seng Index lost 0.8% and the Hang Seng China Enterprises Index of mainland shares traded in the city fell 1%. China’s Shanghai Composite Index slipped 0.3%.