U.S. stocks fell on Monday, with the S&P 500 clearing 2014 gains, as Wall Street closed lower for a third straight session. The S&P 500 posted its biggest three-day decline in two months while the Nasdaq Composite recorded its worst three-day drop since November 2011.
The Dow Jones Industrial Average lost 166.84 points, or 1.02 percent, to close at 16,245.84. The S&P 500 fell 20.05 points, or 1.08 percent, to end at 1,845.04. The Nasdaq Composite dropped 47.97 points, or 1.16 percent, to finish at 4,079.75.
“Gigamon expects revenue for the first quarter to be approximately $31.0 million to $31.5 million, below the company's previously stated guidance of $34.0 million to $35.0 million,” the company said in a press release. “The revenue shortfall was primarily attributable to one expected large transaction from an existing customer in EMEA that did not materialize. In addition, certain other transactions that were expected to close late in the quarter slipped into the second quarter.”
Meanwhile, shares of Google Inc. (NASDAQ:GOOG) edged up 0.11 percent to $538.75 in after-hours trading following a Bloomberg report that said the company had licensed hotel booking software from Expedia-backed Room 77 Inc. Expedia Inc. (NASDAQ:EXPE) shares fell 0.03 percent to $68.53 in extended-hours trade.
Internet stocks were among the biggest decliners during intraday trading on Monday, as Yahoo! Inc. (NASDAQ:YHOO) fell 3.47 percent to $33.07 and Amazon.com, Inc. (NASDAQ:AMZN) lost 1.62 percent to $317.76.
Google (NASDAQ:GOOGL) shares closed down 0.85 percent to $540.63, while Google (NASDAQ: GOOG) stock declined 0.92 percent to finish at $538.15. The Internet giant split its stock last Wednesday and Class A shares now trade under a new ticker symbol “GOOGL” and the other Class C shares trade under “GOOG.” Although the S&P 500 technically has 501 components, it still only has 500 companies.
The decline in tech stocks also weighed on U.S. futures Monday, following a selloff in both Europe and Asia that began late last week after the Nasdaq fell 2.6 percent on Friday, its second-worst one-day loss of the year.
Monday, shares of Tesla Motors Inc. (NASDAQ:TSLA) fell 2.22 percent to close at $207.52 and shares of Priceline Group Inc. (NASDAQ:PCLN) lost 0.71 percent to end Monday’s session at $1,169.73. Netflix Inc. (NASDAQ:NFLX) stock edged up 0.20 percent to finish at $338.
Pfizer Inc. (NYSE:PFE) weighed on the Dow and S&P 500 after the pharmaceutical company’s experimental breast cancer drug revealed positive results in a clinical trial; however, researchers said overall survival was not statistically significant and that a follow-up would be conducted. Pfizer stock dropped 2.99 percent on Monday to close at $31.20.
Ahead this week is the unofficial kickoff of earnings season, beginning with aluminum producer Alcoa Inc. (NYSE:AA) scheduled to post first-quarter earnings after the closing bell on Tuesday. Meanwhile, JPMorgan Chase & Co. (NYSE:JPM) and Wells Fargo & Co. (NYSE:WFC) will report before U.S. markets open on Friday.
“It’s important to note what they [companies] have done in the prior quarter, but we’re going to hear all kinds of excuses from all of the S&P 500 companies this quarter,” Keith Bliss, senior vice president and director of sales & marketing at Cuttone & Co., Inc., told the International Business Times. “It’s either going to be FX was a problem because the dollar strengthened, or we had bad weather in the U.S., so expect that out of most every report you hear. I don’t care about that. That’s ancient history.”
First-quarter earnings for S&P 500 companies are estimated to rise 1.2 percent compared to a year ago, according to Thomson Reuters data, down from the start of 2014 when growth was forecast at 6.5 percent.
“Remember, the stock market is a valuation of the discounted future cash flows of the companies that are within the stock market,” added Bliss. “I want to start getting a gauge on what they think is going to be from top line sales and then earnings second. We expect this quarter overall in the S&P 500 to have an earnings decline, which would be the first time in two years, year-over-year, in earnings decline.”
Shares of Alcoa fell 1.27 percent to close at $12.47 ahead of the company’s earnings release on Tuesday.