Stocks Slammed by Bond Spikes, China Doubts

U.S. stocks opened sharply lower on Monday with the Federal Reserve’s hazy timetable for winding down its  stimulus programs and new signs of a cash strain in China. The Dow Jones Industrial Average lately dropped 232.41 points, or 1.57%, to 14,566.99 and the S&P 500 index fell 27.39 points, or 1.72%, to 1,565.04. The Nasdaq Composite declined 56.70 points, or 1.69%, to 3,300.55.

The Federal Reserve has fallen short of its inflation and employment objectives, New York Fed President William Dudley said Monday. Dudley said that Fed policy, while aggressive by historical standards, is not sufficiently accommodative. Dudley, as New York Fed president, gets a vote at every meeting and is considered one of the more dovish members.

Treasurys continued to sell off in Asia and Europe Monday, pushing haven government debt yields up to their highest levels since 2011. Treasurys have been selling off since the Federal Reserve indicated it may began winding down its bond-purchase program later this year if data continue to show economic growth. The 10-year note yield, which moves inversely to price, was up 10 basis points on the day at 2.636%.

Hospital operator Tenet Healthcare Corp will buy smaller rival Vanguard Health Systems Inc for about $1.73 billion plus the assumption of debt to expand into new geographies, further evidence of consolidation being driven by U.S. President Barack Obama’s healthcare reforms.