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Stocks closed sharply down on Monday, with the Dow dropping almost 200 points, after a Federal Reserve official said the central bank will continue to taper off its stimulus and several companies warned of poor quarterly results.

The Dow Jones Industrial Average posted its worst session since Sept. 20 and closed 179 points, or 1.1 percent, down, with 29 of its 30 components finishing in the red. The S&P 500 lost 23 points, or 1.26 percent, and the Nasdaq was 61 points lower -- a 1.47 percent drop -- on a day when earnings reports began in earnest .

Stocks slumped after a speech Monday afternoon by Atlanta Federal Reserve President Dennis Lockhart, in which he said that if all goes as expected, the central bank would continue to ease off its monthly bond purchases.

"One driver is we're off to a mixed start to the earnings season; negative pre-announcements exceed positive by a record 10-to-1 margin, so the bar has been set very low," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.