MARKET SNAPSHOT: U.S. Stocks Fall; Nasdaq 3-day Loss Worst Since 2011

By Victor Reklaitis and Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- The U.S. stock market fell sharply on Monday as heavy selling in high-growth stocks, which began on Friday, continued to spill over the broader market.

With Monday's session light on economic data, investors looked ahead to the start of first-quarter earnings season, and some analysts sounded downbeat about the coming reports.

The Nasdaq Composite(RIXF) fell 47.97 points, or 1.2%, to 4,079.75, falling below its 100-day moving average. The tech-heavy index lost 4.6% over the past three sessions, the steepest three-day loss since November 2011.

The S&P 500 (SPX) ended the day 20.05 points, or 1.1%, lower at 1,845.04, falling below a key technical level of 1,850 and erasing year-to-date gains. Financial stocks were among the worst hit. See also: Financial stocks fall ahead of earnings.

The Dow Jones Industrial Average(DJI) dropped 166.84 points, or 1.3%, to 16,245.87, with Pfizer Inc. (PFE) and American Express Company (AXP) leading the losses.

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Compared with last week, this week is short on top-tier economic data, so investors are likely to focus instead on earnings reports from the first quarter. Alcoa Inc. (AA), the aluminum producer and former Dow component, unofficially kicks off the earnings season on Tuesday, when it reports results after the closing bell.

"The selloff of high-growth stocks on Friday spilled over to the rest of the market for the first time and it is worrying," said Channing Smith, managing director at Capital Advisors.

"With the economy still muddling through and earnings projected to rise ever so slightly, there are doubts about current valuations, especially among highflying companies on the Nasdaq," he added.

"The weakness has carried over from Friday. It is hard to imagine how the S&P 500 went from a new all-time high to down on the year in just two days, but it happened. The momentum names and technology names were the first to crack, now we are seeing signs that weakness is moving to the overall market," said Ryan Detrick, senior technical strategist at Schaeffer's Investment.

Other analysts have said they're a little skeptical of the naysayers, adding that this will be the 16th quarter or so in a row where we are being cautioned about earnings.

Among individual stocks on Monday, Internet names TripAdvisor Inc.(TRIP) and Baidu Inc. (BIDU) fell 2.7% and 3.9%, respectively, adding to their recent losses.

High-growth companies saw their shares continue to slide. Tesla Motors, Inc shares dropped 2.2%. Pandora Media, Inc. (P) dropped 5%. Telsa and Pandora are one of the handful of momentum stocks that got caught up in Friday's rout.

Shares in Facebook Inc. (FB) dipped in and out of negative territory and closed 0.4% higher. The stock is down more than 18% from its highest closing level, reached on March 10.

Shares in Apple Inc. (AAPL), which is the heaviest-weighted component in both the Nasdaq Composite and the S&P 500, also fell 1.6%.

On the plus side, Questcor Pharmaceuticals Inc.(QCOR) surged 19% after news that Mallinckrodt (MNK) will buy the drug maker for about $5.6 billion. (Read more in the Movers & Shakers column http://www.marketwatch.com/story/questcor-surges-on-buyout-mannkind-sinks-2014-04-07.).

In other markets, Asian and European stock markets lost ground Monday. The dollar (DXY) edged lower, and oil prices fell, with Brent taking the biggest hit on reports that Libya may soon reopen two oil ports. Gold futures dipped and traded below $1,300 an ounce.

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