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Benchmarks tanked significantly on Monday following concerns about corporate earnings numbers and comments from a Fed official hinting at additional tapering. There was hardly any good news for the markets and the triple-digit loss for the Dow dragged it to its worst single-day loss in almost four months. Energy stocks traded lower following a dip in oil prices.

For a look at the issues currently facing the markets, make sure to read today’s Ahead of Wall Street article
 
The Dow Jones Industrial Average slumped more than 179 points or 1.1% to finish yesterday’s trading session at 16,257.94. The Standard & Poor 500 (S&P 500) fell 1.3% to 1,819.20. The tech-laden Nasdaq Composite Index lost the most among these benchmarks as it fell 1.5% to 4,113.30. Volumes were high yesterday, as around 7.1 billion shares changed hands, higher than month-to-date average of 6.44 billion shares (BATS Global Markets). For almost 5 shares that dropped, only 2 managed to finish in the green on the New York Stock Exchange.
 
Investors were very jittery yesterday, which was reflected through the biggest gain in the fear-gauge index in a month. The CBOE Volatility Index (VIX) jumped 9.4% to settle at 13.28.
 
Investors were unnerved by what a Fed official had to say and by Thomson Reuters data published before earnings releases pick up pace. The report notes that about 10 of 11 S&P 500 companies have lowered earnings estimates in the pre-announcement for the earnings season.
 
In fact on Monday, companies such as Lululemon Athletica Inc. (NASDAQ:LULU), Express, Inc. (NYSE:EXPR), Aaron's, Inc. (NYSE:AAN) and Sodastream International Ltd (NASDAQ:SODA) either reported dismal results or forecasts. Shares of these companies fell 16.6%, 4.6%, 6.8% and 26%, respectively.
 
Meanwhile, Atlanta Federal Reserve President Dennis Lockhart said that the Federal Reserve may decide to further trim the stimulus plan if the economy grows as expected. He supported the central bank’s decision to start tapering the &85 billion bond buyback program and said: “I think the conditions are now such... that the committee made an appropriate decision to phase-out the use of that supplemental tool and rely really on interest rate policy, and the explanation of interest rate policy going forward to preserve the accommodation that's needed.”
 
He also said that a 2.5% to 3% economic growth should also allow the central bank to further trim the stimulus package. He said: “I would expect over the course of the year - in similar steps to the first step - we would phase out the program, the tapering would proceed in that way.”
 
The comments come after a witnessed surprisingly a weaker-than-expected nonfarm payrolls report. Termed by some analysts as an ‘anomaly’, the lower-than-expected nonfarm payroll data was indeed surprising as it came after the jobs situation has shown consistent improvement over a decent period. On Friday, the U.S. Bureau of Labor Statistics reported that nonfarm payroll employment moved up 74,000 in December. This was significantly below the consensus estimate of a gain of 192,000.
 
Coming back to Monday’s events, energy stocks tanked following a drop in oil prices. Crude-oil future prices for February delivery were down 92 cents to $91.80 per barrel.
 
The Energy Select Sector SPDR (XLE) dropped almost 2%. Stocks such as Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), BP plc (NYSE:BP), Total SA (NYSE:TOT), ConocoPhillips (NYSE:COP) and Valero Energy Corporation (NYSE:VLO) declined 2.0%, 1.5%, 2.1%, 1.6%, 1.6% and 3.3%, respectively.

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