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New York - Wall Street stocks on Monday dropped in early trade following disappointing German economic data as the market looked ahead to a two-day Federal Reserve monetary policy meeting that opens on Tuesday.
About 30 minutes into trade, the Dow Jones Industrial Average stood at 16 740.13, down 0.39%.
The broad-based S&P 500 dropped 0.58% to 1 953.26 while the tech-rich Nasdaq Composite Index declined 0.66% to 4 454.10.
Equity markets in Britain, France and Germany all fell by at least one percent after the Ifo business climate index for Germany fell to 103.2 points in October from 104.7 points in September, the lowest level since December 2012.
READ: German business confidence slumps
Analysts also cited the reelection of Brazilian President Dilma Rousseff, who is viewed as unfavorable towards business.
Investors are looking to Wednesday's Fed meeting to see if the central bank will follow through on its plan to end its bond-buying program and offer any additional comment on its expectations to raise benchmark interest rates in 2015.
Dow component Merck fell 1.2% as it reported a 20.4% drop in third-quarter earnings to $895m on revenues that came in below expectations. The results translated into earnings of 90 cents per share, two cents above analyst forecasts.
Valeant Pharameuticals of Canada advanced 0.1% as it signaled it would raise its bid for Allergan to $60bn. Botox-maker Allergan lost 0.2% following earnings that translated into $1.78 per share, 10c above analyst forecasts.
Banana producer Chiquita Brands gained 1.4% after announcing it agreed to bought by Brazilian juice exporter Cutrale Group and investment bank Safra Group in a $1.3bn deal.
The deal came after Chiquita shareholders rejected Friday a separate plan to merge with Irish fruit rival Fyffes.
Bond prices rose. The yield on the 10-year US Treasury dipped to 2.26% from 2.27% on Friday, while the 30-year fell to 3.03% from 3.05%. Bond yields and prices move inversely.
