While you were sleeping: Wall Street stocks plunge, bond yields rise

Wall Street retreated from its record highs, weighed down by dividend-heavy real estate and utility stocks.

US Treasuries also fell, as investors prepared for a week that includes a Federal Reserve meeting, US President Donald Trump's first State of the Union address and a slew of corporate results including from Facebook, Amazon and Apple.

At the close of trading in New York, the Dow Jones Industrial Average plunged 177.23 points, or 0.7%, to 26,439.48.

The Nasdaq Composite Index slid 0.5% to 7466.51 and the Standard & Poor's 500 Index dropped 0.7% to 2853.53.

"Today's movement is just a bit of profit taking after last week and ahead of a very busy week," Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, told Reuters.

Investors also pointed to the Nafta trade negotiations with Canada and Mexico.

"In Nafta, for example, there's uncertainty about what happens with trade," Kevin Caron, a senior portfolio manager at Washington Crossing Advisors, told Bloomberg. "And the reason trade is important is because global capital flows are inexorably linked with trade flows. So if something were to happen unexpectedly with trade, it would also have implications for the flow of capital around the world."

US Treasuries dropped, sending the yield on the 10-year note above the 2.70% for the first time since April 2014. Yields are rising because investors have bet on a jump in growth and inflation following the passage of US corporate tax cuts.

The Dow moved lower as declines in Caterpillar and Apple, recently down 2.6% and 1.6% respectively, outweighed gains by Goldman Sachs and General Electric, up 1.6% and 1.2% respectively.

Soft drink merger valued at $US21 billion
Bucking the general trend, shares of Dr Pepper Snapple Group soared 25% after JAB Holding's Keurig Green Mountain agreed to take control of the company in a deal that brings together soft-drink brands such as 7UP, A&W, Mott's and Sunkist with Keurig's single-serve coffee system.

Under the terms of the agreement, Dr Pepper Snapple shareholders will receive $US103.75 per share in a special cash dividend and retain 13% of the combined company.

The newly-formed entity, named KDP, will have pro forma combined 2017 annual revenues of about %US11 billion, the companies said.

Including a $US18.7 billion cash payout to Dr Pepper Snapple shareholders, Thomson Reuters calculations put the value of the deal in excess of $US21 billion.

JAB and its partners will together make an equity investment of $US9 billion as part of the financing of the transaction, the companies said.

"The combination of Dr Pepper Snapple and Keurig will create a new scale beverage company which addresses today's consumer needs, with a powerful platform of consumer brands and an unparalleled distribution capability to reach virtually every consumer, everywhere," Bob Gamgort, chief executive officer of Keurig, said in the statement.

Also eyeing deals is Tyson Foods. The largest US meatpacker is looking to acquire companies that would boost its food brands and geographic reach, CEO Tom Hayes said in an interview at the World Economic Forum's annual meeting in Davos, Switzerland, last week, Bloomberg reported.

Tyson also has an eye on expanding its international footprint by adding operations and increasing US exports. Hayes said the recent US tax reform were "very positive" for Tyson and might save the company more than $US300 million, some of which it will use to boost capital expenditures, Bloomberg reported.

"If we can find those that are bolt-on to our current system that gives us more capacity in a growing category, that's great," Hayes told Bloomberg. However, valuations have been "very high," forcing Tyson to take a cautious approach, he said.

Tyson shares traded 0.4% weaker.

In Europe, the Stoxx 600 Index declined 0.2%. France's CAC40 Index fell 0.1%, as did Germany's DAX Index and the UK's FTSE 100 Index, which was bolstered by Glencore and Rio Tinto.

(BusinessDesk)