US close: Stocks end lower as Turkey woes continue to weigh

US stocks ended in the red on Monday, unable to hold on to earlier gains as worries about Turkey continued to undermine sentiment.

The Dow Jones Industrial Average ended down 0.5% at 25,187.70, the S&P 500 fell 0.4% to 2,821.93 and the Nasdaq slipped 0.3% to 7,819.71.

Measures announced by Turkey’s central bank, including a pledge to provide "all the liquidity the banks need" to ensure stability, did little to assuage investors. Domestic banks will also be able to borrow foreign-exchange deposits from the central bank at a one-month maturity and one-week maturities.

Although the lira did pare some of its losses over the weekend, its slide soon resumed, with weakness spreading to other currencies, hitting the South African rand, the Russian ruble and the Indian rupee.

Analysts argued that investors would have liked to see the central bank take more affirmative action, such as hiking interest rates. Rabobank said the measures announced were seen as just "a first step in several needed to limit further turmoil".

Still, Pantheon Macroeconomics said the crisis in Turkey, while very bad for Turkish people and bad for some European banks, is not a serious threat to the US economy, or the banking system, or the Fed's plans to continue with the gradual normalisation of policy.

"US banks' total claims on Turkey amounted to just $38bn at the end of March this year, not much more than claims on Finland and just 0.6% of all cross-border claims. Even if all these claims were to be written off - they won't be - the impact on the U.S. banking system would be minimal. It's a different story for Europe, where Spanish banks are very exposed, holding some $81bn of claims on Turkey."

On the corporate front, electric car maker Tesla ended just a touch higher after chief executive Elon Musk said in a blog post that Saudi Arabia’s sovereign wealth fund had expressed interest in helping the company to go private. Chris Beauchamp at IG said: "Crucially, it looks like the ‘funding secured’ reference was perhaps an exaggeration, since today’s details suggest a supportive stance from Saudi funds but not outright commitment."

Over the weekend, it emerged that Tesla is being sued over Musk's Twitter claims last week that he was considering taking the company private.

Elsewhere, clothing group VF Corp ended in the red after the Lee and Wrangler owner said it will spin off its denim business into an independent public company.

Microsoft slipped on news that the company's chief executive officer Satya Nadella sold almost one third of his shares.

Sysco rallied on the back of better-than-expected fourth-quarter results, while Twitter was boosted by an upbeat note from Citron Research, which said the stock could reach $52 within weeks.

Hologic was lower after the company said its Cynosure division would suspend marketing and distribution of its Vitalia TempSure device, while Dycom Industries tumbled after downgrading its second-quarter profit and sales outlook.