U .S. stocks fell Monday as the price of oil slumped again, giving up some of the ground it gained late last week. That pushed energy companies lower.
The stock market opened lower and stayed in the red all day. The selling accelerated in the last hour of trading. The biggest losses came in the energy sector and companies that make chemicals and paper goods.
The Dow Jones industrial average fell 208.29 points, or 1.3%, to 15,885.22. The Standard & Poor's 500 index shed 29.82 points, or 1.6%, to 1,877.08. The Nasdaq composite index sank 72.69 points, or 1.6%, to 4,518.49.
Plunging oil prices have been decimating profits at energy companies and making investors worry that the global economy is slowing down. Companies that mine metals, especially copper, face the same problem. Low oil prices are also hurting banking stocks because some banks hold large amounts of loans from energy companies, and investors fear they may not get paid back.
The price of benchmark U.S. crude fell $1.85, or 5.7%, to $30.34 a barrel in New York. Brent crude, a benchmark for international oils, sank $1.68, or 5.2%, to $30.50 a barrel in London. U.S. oil jumped 9% on Friday after setting 12-year lows earlier in the week.
Exxon Mobil sank $2.59, or 3.4%, to $73.98, and Chevron fell $2.65, or 3.2%, to $80.89. Chesapeake Energy sank 56 cents, or 16%, to $2.95.
Paper and packaging companies fell on concerns about product prices falling. WestRock went down $5.63, or 14.9%, to $32.11, and International Paper declined $3.87, or 10.6%, to $32.58.
Mark Wilde, managing director at BMO Capital Markets, said stocks in that sector are falling because an influential trade publication estimated that prices for containerboard, an important product, fell sharply in January.
"I think it confirms people's fears," Wilde said. "Falling prices are going to mean lower earnings."
Friday was the best day for the S&P 500 since early December. It was the biggest gain for the Nasdaq composite index since September. That helped stocks make their first weekly gain in the last four weeks.
The shaky global outlook helped push companies to make a slew of big deals last year, and that trend continued Monday as Tyco International and Johnson Controls said they would combine. Tyco makes fire-suppression systems, and Johnson Controls makes ventilation systems, auto seating and car batteries. Both stocks have struggled as investors worried about their growth.
Tyco shares jumped $3.56, or 11.6%, to $34.15, the biggest gain in the S&P 500. Johnson Controls stock sank $1.39, or 3.9%, to $34.21.
Companies spent a record $5 trillion on acquisitions and other deals last year, a big jump from 2014. Although few deals have been announced in the first weeks of 2016, business technology company Intralinks predicts that will change. It expects that global deal value in the first half of this year will rise 3.5%, to a total of almost $2.3 trillion.
John Manley, chief equity strategist for Wells Fargo Fund Management, said he expects another big year of deals even though interest rates are likely to rise. That's because companies around the world are still looking for ways to become more efficient and lift their earnings and sales growth.
"I have no reason to think it's going to slow down," he said.
The economic outlook didn't get any brighter Monday. Business economists became more pessimistic about profits and sales than they were last fall and expect slower economic growth, according to a survey by the National Assn. for Business Economics. However, most of the survey participants said their companies plan to raise wages in the first quarter. That's the largest proportion in more than a year.
Heavy machinery maker Caterpillar sank after Goldman Sachs downgraded the stock to "sell." Analyst Jerry Revich said companies worldwide are spending less money on machinery because commodity prices have dropped. Caterpillar sank $3.07, or 5%, to $57.91.
McDonald's rose after the restaurant chain said its U.S. sales grew 5.7% in the fourth quarter, its best result in more than three years. The company said its all-day breakfast menu and the warm weather helped its sales. Overall, its sales rose 5%. The stock edged up 80 cents to $119.20.
Twitter continued to slide after the company said four executives, including its head of engineering, will leave the company. The stock sank 82 cents, or 4.6%, to $17.02. Twitter is down 57% in the last year.
Asian markets rose. Japan's Nikkei 225 rose 0.9%, and Hong Kong's Hang Seng jumped 1.4%. Germany's DAX sank 0.3%, France's CAC 40 slid 0.6%, and Britain's FTSE 100 declined 0.4%.
In other energy trading, wholesale gasoline fell 5 cents, or 5%, to $1.03 a gallon. Heating oil dropped 6 cents, or 6.1%, to 93.5 cents a gallon. Natural gas rose 1.9 cents to $2.158 per 1,000 cubic feet.
The price of gold rose $9 to $1,105.30 an ounce, and silver climbed 19.7 cents, or 1.4%, to $14.254 an ounce. Copper fell less than half a cent to $1.998 per pound.
U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2% from 2.06%. The euro rose to $1.0837 from $1.0791 late Friday. The dollar fell to 118.48 yen from 118.78 yen.