Week starts out with a big thud

Stock traders work at the New York Stock Exchange, Monday, Feb. 4, 2013. (AP Photo/Mark Lennihan)
Stock traders work at the New York Stock Exchange, Monday, Feb. 4, 2013. (AP Photo/Mark Lennihan) (Mark Lennihan)
Posted: February 06, 2013

Stocks hit a big milestone, then promptly spun off the road.

Major indexes dived the most this year Monday, the first trading day after the Dow broke 14,000 and closed at its highest level since the financial crisis.

The Dow Jones industrial average dropped as much as 143 points in afternoon trading. It closed down 129.71, or 0.9 percent, at 13,880.08.

The Standard & Poor's 500 index fell 17.46 points, or 1.2 percent, to 1,495.71. The Nasdaq composite index lost 47.93, or 1.5 percent, to 3,131.17.

Monday's declines were the biggest drops this year for all three indexes. They followed a surge Friday that pushed the Dow over 14,000 for the first time since 2007, before the financial meltdown that routed world markets.

Friday was only the 10th time in its history that the Dow closed above 14,000. The first was in July 2007; the rest were in October of that year. The index closed Friday just 155 points shy of its record high, set that October.

Wall Street's celebratory mood was a distant memory Monday, as U.S. stocks followed European markets lower. France's CAC-40 closed down 3 percent, Germany's DAX 2.5 percent.

Merck & Co. Inc. was among the Dow's biggest losers, dropping 98 cents, or 2.3 percent, to $40.85. The pharmaceutical company said Friday that its earnings declined in the fourth quarter and 2013 might be weaker than analysts had hoped.

Boeing Co. was the only rising stock among the 30 in the Dow.

Corporate earnings reports continue this week. Health insurer Humana leapt $3.51, or 4.7 percent, to $78.86 after its results beat Wall Street's forecasts.

Cruise operator Royal Caribbean fell after reporting a quarterly loss related to its Spanish cruise line, Pullmantur. Prices and bookings have plunged since the Spanish government imposed strict austerity measures, limiting Spaniards' ability to spend. Royal Caribbean shares dropped $1.26, or 3.4 percent, to $35.53.

Media company Gannett Co Inc. fell $1.33, or 6.7 percent, to $18.51. Gannett's earnings beat Wall Street's expectations, but the company warned that its TV ad revenue will be hurt this quarter by the absence of $5.1 million in political spending and the move of the Super Bowl from NBC to CBS.

Among other companies making big moves was network gear maker Acme Packet Inc., which surged $5.66, or 23.7 percent, to $29.59 after Oracle said it would acquire the company for $2.1 billion.

McGraw-Hill Cos. plunged $8.04, or 13.8 percent, to $50.30 after midday news reports that the Justice Department plans to file civil charges against the company's Standard & Poor's credit rating unit. The government charges are expected to question S&P's high ratings of mortgage bonds that helped fuel the financial crisis.

Moody's Corp., another rating agency, followed McGraw-Hill down, even though there is no evidence that the government will charge that company. Moody's closed down $5.90, or 10.7 percent, at $49.45.

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