MarketView for November 18

Summary

Please explain this to me. One individual says he is nervous about the markets and Wall Street falls on its face; and this after he basically threatened Apple with a proxy fight if they did not do what he wanted. Yes, Carl Icahn is a wealthy and successful investor, no argument. At the same time, he now more knows what the future holds for the markets than anyone else. Nonetheless, The S&P 500 and the Nasdaq indexes ended the day lower on Monday while the Dow failed to close above its milestone level of 16,000 as stocks sold off late in the session following Carl Icahn's cautious comments on the equities market.

The Dow and the S&P 500 retreated from record levels with less than an hour to go in Monday's session. The Nasdaq, which had been down slightly for most of the day, fell 1.1 percent to a session low.

Speaking at the Reuters Global Investment Outlook Summit, Icahn said he is "very cautious" on the stock market, saying he could see a "big drop" because earnings at many companies are fueled more by low borrowing costs rather than the strength of management.

He also hinted at his plan for Apple, the most valuable stock by market value, saying he does not want to fight with the management of the iPhone maker. He also said he has no plans to walk away from his investment. The stock extended losses following his comments, ending down 1.2 percent at $518.63 on Monday.

The Nasdaq was hammered by a sell-off in social media and cloud-related stocks, including Facebook, down 6.5 percent at $45.83. Twitter fell 6.5 percent to $41.14 after a downgrade by Wunderlich Securities. Tesla also extended losses, down more than 10 percent at $121.58. The electric car maker's stock has lost nearly 24 percent for the month so far.

On a positive note, Boeing ended the day up 1.7 percent to close at $138.36 after the company did well at the Dubai Airshow on Sunday, announcing commitments for a total of 259 of its new 777 jets. Worth about $100 billion at list prices, it is the largest combined order in Boeing's history.

A number of Fed members offered more insights into the central bank's stimulus. The latest was Charles Plosser, president of the Philadelphia Fed, who said improved economic and labor market conditions suggest the Fed should set a fixed dollar amount on its current bond-buying program and end the program when that amount is reached.

William Dudley, the president of the Federal Reserve Bank of New York, said on Monday that he was becoming "more hopeful" regarding the economy.

However, with intervention from the Fed likely to keep interest rates near zero for the foreseeable future, equities are expected to continue to attract yield-seeking investors, even after the Fed begins to scale back its asset purchases.

Approximately 5.4 billion shares changed hands on the three major equity exchanges, a number that was slightly below the five-day average closing volume of about 5.8 billion shares, according to BATS exchange data.