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S&P 500 Posts Worst Day Since November

U.S. stocks slid on Monday, giving the S&P 500 its worst day since November, as renewed worries about the euro zone crisis caused the market to pull back from recent gains.
Shares of McGraw-Hill shed 13.8 percent to $50.30, their worst daily percentage decline since the October 1987 market crash, after news the U.S. Justice Department plans to sue Standard & Poor's, a unit of McGraw-Hill, over its mortgage bond ratings. It would be the first such federal action against a credit rating agency related to the recent financial crisis.
Chevron and Wal-Mart were among the biggest drags on the Dow after analyst downgrades, and all 10 S&P 500 sectors were lower. The losses follow Friday's market climb that left the S&P 500 at a five-year high and the Dow above 14,000.
"The market is extended and due for a pullback. I think people are looking for an excuse to make sales, and there (is) the concern coming from Europe,'' said Michael James, senior trader at Wedbush Morgan in Los Angeles.
Spanish and Italian bond yields rose, renewing worries about the euro zone's sovereign debt crisis. Spain's prime minister faced calls to resign over a corruption scandal, while a probe of alleged misconduct involving an Italian bank was expected to widen three weeks before a national election.
Adding to market pressure, data from the U.S. Commerce Department showed overall factory orders for December were below economists' expectations.
The Dow Jones industrial average was down 129.71 points, or 0.93 percent, at 13,880.08. The Standard & Poor's 500 Index was down 17.46 points, or 1.15 percent, at 1,495.71. The Nasdaq Composite Index was down 47.93 points, or 1.51 percent, at 3,131.17.
With 18.7 billion shares traded, it was the busiest day on record for McGraw-Hill shares. Shares of ratings agency Moody's Corp fell 10.7 percent at $49.45, their worst one-day drop since August 2011.
The benchmark S&P 500 rose on Friday, leaving it roughly 60 points away from its all-time intraday high of 1,576.09, while the Dow's march above 14,000 was the highest for the index since October 2007.

The S&P index remains up about 5 percent for the year, with nearly half of the gains coming after U.S. legislators  temporarily sidestepped the ``fiscal cliff'' of automatic tax increases and spending cuts.
The CBOE Volatility index VIX, Wall Street's so-called fear gauge, jumped 13.7 percent.
Chevron dipped 1.1 percent to $115.20 after UBS cut its rating to neutral, while Wal-Mart Stores Inc shed 1.2 percent to $69.63 after JP Morgan lowered its rating on the world's largest retailer and reduced its price target.
Shares of household products company Clorox rose 0.7 percent to $79.72 after quarterly profit beat analysts' estimates as a severe flu season boosted sales of disinfecting wipes.
According to Thomson Reuters data, of the 256 companies in the S&P 500 that have reported earnings through Monday morning, 68.4 percent have reported earnings above analyst expectations, compared with the 62 percent average since 1994 and the 65 percent average over the past four quarters.
S&P 500 fourth-quarter earnings are expected to rise 4.4 percent, according to the data. That estimate is above the 1.9 percent forecast at the start of earnings season, but well below the 9.9 percent forecast on Oct. 1.
In deal news, software maker Oracle Corp agreed to buy network equipment company Acme Packet Inc for $1.7 billion net of cash. Shares of Oracle were down 3 percent at $35.13 while Acme Packet shot up 23.7 percent to $29.59.
Shares of Herbalife Ltd ended up 1.3 percent at $35.54, recovering its losses ahead of the close. The New York Post reported the seller of weight loss products is facing a probe by the Federal Trade Commission.
Volume was roughly 6.3 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with the 2012 average daily closing volume of about 6.45 billion.
Decliners outpaced advancers on the NYSE by nearly 4 to 1 and on the Nasdaq also by about 4 to 1.

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