Nasdaq falls, led by Facebook and Amazon; Dow up

Bank of America's suspension of planned dividend increase weighs on S&P 500

The Nasdaq tumbled on Monday, led by a selloff in Facebook and Amazon.com, as Bank of America's suspension of a planned dividend increase weighed on the S&P 500.

The three major US stock indexes lost ground after Reuters, citing sources, reported that European Central Bank President Mario Draghi sees quantitative easing as still a ways away.

The S&P 500 financial index fell 1%.

The S&P consumer discretionary index, which includes Amazon, dropped 0.8%.

Amazon.com lost 3.1% to $294.74, extending Friday's sharp decline a day after its earnings report. Facebook fell 3.2% to $55.88.

High-growth stocks such as those have been battered in recent weeks as investors have pulled out of the tech and biotech space.

"The rest of the market caught up with what's going on in the Nasdaq," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "What's causing it? I think it's just momentum feeding on itself. Downward price action is feeding on itself, and it's bringing out more sellers."

Bank of America shares tumbled 6.8% to $14.87 after the company said it will suspend a planned increase in its quarterly dividend as well as its latest stock-buyback program because it miscalculated a measure of the capital on its books.

Chinese Internet stocks fell after China's government ordered the removal of four US television shows, including "The Big Bang Theory," from video websites during the weekend. The US-listed shares of Baidu declined 7.5% to $150.67.

Earlier in the session, stocks hit session highs during a flurry of merger and acquisition activity in the pharmaceutical sector.

The Dow Jones industrial average rose 13.39 points or 0.08%, to 16,374.85. The S&P 500 lost 3.33 points or 0.18%, to 1,860.07. The Nasdaq Composite dropped 27.922 points or 0.69%, to 4,047.64, after falling more than 1% in afternoon trading.

Shares of Pfizer Inc, a Dow component, gained 3.6% to $31.85 after the US drugmaker was said to be working on its next move in a potential $100 billion bid to take over Britain's AstraZeneca Plc, after two earlier bids were rejected. Pfizer's gains helped support the Dow.

In another M&A deal, Forest Laboratories Inc said it would buy Furiex Pharmaceuticals Inc for up to $1.46 billion, including milestone payments to add Furiex's promising treatment for irritable bowel syndrome to Forest's portfolio of gastrointestinal drugs.

Furiex Pharmaceuticals shares surged 28.5% to $103.01 while Forest Laboratories shares shed 0.9% to $89.02.