US close: Stocks end in the red after China selloff

US stocks closed lower on Monday on the back of a global selloff triggered by a sharp decline in Chinese stocks.

The Dow Jones Industrial Average closed down 0.7%, the S&P 500 fell 0.6% and the Nasdaq ended 1% lower.

China drives selloff

Asian stocks were under pressure following negative data from China with a resumption of selling in commodities weighing heavily on investor sentiment.

The Shanghai Composite index plunged 8.47% - its worst performance in three weeks.
The drop was due to the release of data which showed industrial profits fell 0.3% in June and a decline in commodity prices.

“Global investors are heavily exposed to China as a source of global economic growth,” said CMC Markets’ analyst Jasper Lawler.

“The stock market crash in China is spreading to other markets because the risk is Chinese state control will eventually send the economy to the same fortune.

Monday data

Orders for US durable goods rose by 3.4% month-on-month, ahead of expectations of a 2.6% increase, according to figures released by the Commerce Department.

"The growth in manufacturers’ inventories of durable goods was notably stronger than expected in June and represents the fastest pace of inventory stocking for the sector since December of last year," Barclays analysts said in a note.

"This boosted our estimate of private inventory investment in the second quarter, more than offsetting the decline in estimate equipment investment.

"On net, our second quarter GDP tracking estimate rose two-tenths, to 3.4%."
However, the reading represented a 2.0% drop year-on-year.”

Also on the data front, the Dallas Fed manufacturing survey for July came in at -4.6, missing expectations for a print of -3.5.

The main focus for investors this week will be the Federal Reserve Open Market Committee’s two-day meeting, which culminates in a rate decision on Wednesday. No change in rates is expected until at least September, but all eyes will be on the Fed’s guidance for any further clues on the timing of a move.

Deutsche Bank analyst Jim Reid said: “It’s going to be raining data and earnings this week with also an FOMC meeting which may give us a few clues as to September's more important meeting. However it’s unlikely they'll change their tune too much but it will be interesting to see if the recent slump in commodities and its impact on inflation attract much comment.”

Teva surges on acquisition

Shares in Mylan NV plunged 14.5% as Teva Pharmaceutical Industries announced it had withdrawn its offer for the drug maker after agreeing to acquire Allergan’s generic drug-making business for $40.5bn.

Teva and Allergan jumped 8.9% and 6.2% respectively.

Fiat Chrysler ended in the red as it emerged the company faces a $105m civil fine and will need to buy back 500,000 Ram pickup trucks in order to settle legal problems over recall errors.

McGraw Hill Financial closed 5.7% weaker after revealing plans to buy SNL Financial for about $2.2 billion in cash. The company, which owns Standard & Poor’s Ratings Services, said the deal is expected to close in the third quarter and could generate $550m in tax synergies.

Elsewhere, the dollar fell a touch against the yen, dropped just over 1% against the euro and nudged up against the pound, while gold futures rose 0.6% to $1,092.00.

Oil prices slid, with West Texas Intermediate losing 2.2% to $47.07 a barrel, while Brent shed 3.1% to $52.93 a barrel.

S&P 500 - Risers
Allergan plc (AGN) $327.34 +6.21%
Amgen Inc. (AMGN) $165.57 +4.40%
Perrigo Company plc (PRGO) $193.64 +3.83%
United States Steel Corp. (X) $16.79 +3.32%
Biogen Inc (BIIB) $309.43 +3.13%
PG&E Corp. (PCG) $51.80 +2.88%
Windstream Holdings Inc (WIN) $4.70 +2.84%
Keurig Green Mountain Inc (GMCR) $71.36 +2.81%
Nucor Corp. (NUE) $43.81 +2.74%
Edison International (EIX) $58.95 +2.25%

S&P 500 - Fallers
Peabody Energy Corp. (BTU) $1.03 -16.94%
Mylan Inc. (MYL) $56.31 -14.60%
Freeport-McMoRan Inc (FCX) $11.37 -7.49%
Newfield Exploration Co (NFX) $30.90 -5.74%
McGraw Hill Financial Inc (MHFI) $99.60 -5.66%
QEP Resources Inc (QEP) $12.82 -5.53%
Roper Technologies Inc (ROP) $164.21 -4.59%
E*TRADE Financial Corp. (ETFC) $27.36 -4.07%
Joy Global Inc. (JOY) $25.82 -3.98%
Harman International Industries Inc. (HAR) $104.24 -3.93%

Dow Jones I.A - Risers
Intel Corp. (INTC) $28.35 +1.05%
General Electric Co. (GE) $25.96 +0.82%
Pfizer Inc. (PFE) $34.40 +0.41%
Travelers Company Inc. (TRV) $105.62 +0.35%
Coca-Cola Co. (KO) $40.54 +0.25%

Dow Jones I.A - Fallers
Boeing Co. (BA) $141.14 -2.03%
Chevron Corp. (CVX) $89.13 -1.62%
JP Morgan Chase & Co. (JPM) $67.99 -1.34%
Apple Inc. (AAPL) $122.89 -1.29%
American Express Co. (AXP) $74.92 -1.29%
Visa Inc. (V) $73.86 -1.26%
Microsoft Corp. (MSFT) $45.39 -1.20%
Nike Inc. (NKE) $111.77 -1.08%
Caterpillar Inc. (CAT) $75.33 -1.01%
Goldman Sachs Group Inc. (GS) $205.31 -0.98%

Nasdaq 100 - Risers
Amgen Inc. (AMGN) $165.57 +4.40%
Biogen Inc (BIIB) $309.43 +3.13%
Keurig Green Mountain Inc (GMCR) $71.36 +2.81%
Seagate Technology Plc (STX) $47.90 +1.23%
Intel Corp. (INTC) $28.35 +1.05%
Maxim Integrated Products Inc. (MXIM) $33.85 +0.85%
CH Robinson Worldwide Inc (CHRW) $64.77 +0.72%
Google Inc. Class C (GOOG) $627.29 +0.60%
QUALCOMM Inc. (QCOM) $61.99 +0.57%
Google Inc. (GOOGL) $658.40 +0.55%

Nasdaq 100 - Fallers
Mylan Inc. (MYL) $56.31 -14.60%
Tesla Motors Inc (TSLA) $253.01 -4.67%
Baidu Inc. (BIDU) $197.69 -4.15%
Vimpelcom Ltd Ads (VIP) $5.08 -3.97%
Wynn Resorts Ltd. (WYNN) $99.22 -3.13%
Avago Technologies Ltd. (AVGO) $124.65 -2.98%
Facebook Inc. (FB) $94.17 -2.87%
Netflix Inc. (NFLX) $106.45 -2.64%
Yahoo! Inc. (YHOO) $37.83 -2.61%
Nxp Semiconductors Nv (NXPI) $88.22 -2.28%