US stocks fell on Monday, led by the S&P energy index's biggest one-day percentage drop since late August as oil prices slid to their lowest point in nearly seven years. US crude oil futures CLc1 settled down almost 6 percent while Brent crude LCOc1 fell more than 5.3 percent after OPEC's meeting last week failed to address a growing supply glut.
The S&P energy sector energy index closed down 3.7 percent after dropping as much as 5 percent earlier in the session and oil majors Exxon and Chevron were the biggest drags on the S&P, with almost 3 percent declines. The major US indexes pared losses late in the session. "The fast and frenetic selling of the morning finally got exhausted and it seems like everything got too stretched to the downside," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. “Oil is going to be staying at some ridiculously low price for a very long period of time,” he added. Oil's tumble also hurt the S&P materials index .SPLRCM which fell 1.8 percent, its steepest drop in over three weeks.
Materials stocks were also hurt by "an overhang from the continuing slowing of the Chinese economy," according to Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. The Dow Jones industrial average fell 117.12 points, or 0.66 percent, to 17,730.51, the S&P 500 lost 14.62 points, or 0.7 percent, to 2,077.07 and the Nasdaq Composite dropped 40.46 points, or 0.79 percent, to 5,101.81.
Stock investors were also wary after Friday's November employment report intensified expectations that the economy would be strong enough to absorb an interest rate hike when the Federal Reserve meets on Dec. 15-16.
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