US stocks drop on Greece default fears
NEW YORK–US stocks dropped Monday as worry about a Greek debt default more than offset a positive reaction to big deals in the pharmaceuticals and homebuilder sectors.
The Dow Jones Industrial Average fell 107.67 points (0.60 percent) to 17,791.17.
The broad-based S&P 500 fell 9.68 (0.46 percent) to 2,084.43, while the tech-rich Nasdaq Composite Index fell 21.13 (0.42 percent) to 5,029.97.
European stocks fell sharply after weekend talks between Greece and creditors collapsed. US stocks were in the red all day as well, although the S&P 500 finished well above its session low of 2,072.49.
Homebuilders Ryland Group and Standard Pacific surged on news they are combining to create a company with a market capitalization of $5.2 billion and an enterprise value of $8.2 billion.
This July 15, 2013, file photo shows the New York Stock Exchange in New York. US stocks dropped Monday as worry about a Greek debt default more than offset a positive reaction to big deals in the pharmaceuticals and homebuilder sectors. AP PHOTO/MARK LENNIHAN
Ryland gained 5.2 percent, while Standard Pacific tacked on 5.6 percent.
Target rose 1.2 percent on news it will sell its pharmacy and clinic business for about $1.9 billion to CVS Health. CVS Health will acquire more than 1,660 pharmacies operating inside Target stores, and will expand its MinuteClinic chain in Target as well. CVS Health gained 0.4 percent.
Health insurer Cigna vaulted 11.7 percent higher after the Wall Street Journal reported that larger rival Anthem offered about $45 billion to buy it. Cigna has so far rebuffed the overture, apparently over who would run the combined company. Anthem added 2.3 percent.
Aetna, which was also mentioned by the Journal as a potential takeover target, rose 4.4 percent.
Shares of Dealertrack Technologies, which provides software to auto dealers and lenders, jumped 58 percent higher on news it will be bought by Cox Automotive for $4 billion. Cox owns Kelley Blue Book and provides marketing and software services to the auto industry and consumers.
Chipmaker Micron Technology shed 3.5 percent following a downgrade by Morgan Stanley, which said high product inventories are depressing prices, leading to weakness in 2015 and uncertainty for next year.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.36 percent from 2.39 percent Friday, while the 30-year dropped to 3.09 percent from 3.10 percent. Bond prices and yields move inversely.
