Market Wrap: Wall Street Falls; Pfizer, Allergan Drag

US Markets Open For Shortened Thanksgiving Holiday Week
Spencer Platt/Getty Images

By Sinead Carew

NEW YORK -- U.S. stock indexes closed slightly lower in quiet trading Monday on Wall Street after last week's strong gains, while a big health care deal failed to impress investors.

Pfizer's (PFE) announcement of what is expected to be the biggest-ever health care deal pushed its shares down 2.6 percent making it one of the biggest drags on the S&P. Target company Allergan (AGN) closed 3.4 percent lower after the $160 billion deal announcement.

%VIRTUAL-pullquote-Today was a dull day unless you're involved in Pfizer or Allergan. Away from that, it's kind of aimless.%"Today was a dull day unless you're involved in Pfizer or Allergan. Away from that, it's kind of aimless," said Brian Fenske, head of sales trading at ITG in New York. "Nobody was panicking when the market was going lower. It wasn't really on heavy volume."

The Dow Jones industrial average (^DJI) fell 31.13 points, or 0.2 percent, to 17,792.68, the Standard & Poor's 500 index (^GSPC) lost 2.58 points, or 0.1 percent, to 2,086.59 and the Nasdaq composite (^IXIC) dropped 2.44 points, or less than 0.1 percent, to 5,102.48.

Disappointment in the Pfizer-Allergan deal was driven by weaker-than-hoped-for projected savings from the complex deal, antitrust issues, along with a possible delay in Pfizer's plan to split into two companies, according to analysts.

A few days ahead of the Thanksgiving holiday, when markets are closed and traders take time off, about 6.18 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the 20 sessions, according to Reuters data.

Unimpressive Data

After a week when the S&P 500 had its best performance of the year, investors were unimpressed by Monday's economic data and some were concerned that economic growth may be slower than expected, said Stephen Massocca, Chief Investment Officer of Wedbush Equity Management in San Francisco.

"We had a very large rally last week and it's not surprising to see the market correct after that," said Massocca.

Sales of existing homes fell in October as a persistent shortage of properties limited choice for potential buyers and pushed up prices, suggesting some softening in the housing market recovery after strong gains early this year.

A separate report showed Markit's Purchasing Managers Index hit a 25-month low in early November, highlighting continued weakness in the factory sector.

S&P utilities were the worst performer with a 1 percent decline, followed by telecommunications services. Those sectors tend to be affected by expectations for a U.S. Federal Reserve hike in interest rates.

The staples was the strongest, led by a 10.2 percent increase in shares of Tyson Foods (TSN) to $48.09 after its quarterly sales beat estimates.

The energy sector rose 0.7 percent, as crude prices were volatile after Saudi Arabia agreed to cooperate with other oil producers to stabilize prices but traders worried about a global supply glut and signs of rising U.S. stockpiles.

Advancing issues outnumbered decliners 1,581 to 1,466, for a 1.08-to-1 ratio; on the Nasdaq, 1,566 issues rose and 1,236 fell, a 1.27-to-1 ratio favoring advancers. The S&P 500 posted 25 new 52-week highs and 4 lows; the Nasdaq recorded 77 new highs and 77 lows.

-Abhiram Nandakumar contributed reporting from Bangalore, India.

What to watch Tuesday:

  • The Commerce Department releases its second estimate for the third-quarter gross domestic product at 8:30 a.m. Eastern time.

  • Standard & Poor's releases S&P/Case-Shiller index of home prices for September and the third quarter at 9 a.m.

  • The Conference Board releases the Consumer Confidence Index for November at 10 a.m.

Earnings Season
These selected companies are scheduled to report quarterly financial results.

  • Burlington Stores (BURL)

  • Campbell Soup Co. (CPB)

  • Cracker Barrel (CBRL)

  • Dollar Tree (DLTR)

  • Hewlett Packard Enterprise (HPE)

  • Hormel Foods (HRL)

  • HP Inc. (HPQ)

  • Signet Jewelers (SIG)

  • Tiffany & Co. (TIF)

  • Valspar (VAL)

Originally published