US stocks slipped on Monday as crude oil climbed to a record $64 a barrel, stoking concerns about the impact of high energy costs on corporate profits and consumer spending, while worries about rising interest rates hurt shares of banks and home builders.
Shares of companies sensitive to higher borrowing rates slipped, with the Dow Jones index of home construction companies falling 3.4 percent in the session before Tuesday's Federal Reserve policy-setting meeting.
The Dow Jones industrial average slipped 21.10 points, or 0.20 percent, to end at 10,536.93. The Standard & Poor's 500 index edged down 3.29 points, or 0.27 percent, to finish at 1,223.13. The technology-laced Nasdaq Composite Index fell 13.52 points, or 0.62 percent, to close at 2,164.39.
For the first time since March 12, the Nasdaq ended lower for the fourth session in a row. Both the Dow and the S&P 500 closed lower for the third straight session for the first time since June 27. Decliners outpaced advancers by a ratio of 5 to 3 on the New York Stock Exchange and about 3 to 2 on the Nasdaq.
US crude oil for September delivery settled up $1.63 at $63.94 a barrel after earlier hitting a record $64 on the New York Mercantile Exchange, the highest since the oil futures contract started trading in 1983, amid fears of militant attacks in Saudi Arabia, the world's biggest oil producer.
While higher oil prices usually weigh on stocks as they could hurt corporate profits and curb consumer spending, they boost shares of energy companies.
Shares of oil company and Dow component Exxon Mobil Corp rose 1.3 percent, or 76 cents, to $58.85. The American Stock Exchange index of energy companies rose 2 percent.
Interest-rate concerns dragged on the shares of housing finance company Fannie Mae, down 1.4 percent, or 76 cents, at $54.20, and Dow component Citigroup Inc, which lost 0.8 percent, or 33 cents, to $43.30. Higher interest rates increase borrowing costs and weigh on profits.
Shares of home builders also slipped, with Pulte Homes Inc falling 3.6 percent, or $3.20, to $86.75, and KB Home dropping 2.8 percent, or $2.05, to $72.45.
The yield on the benchmark 10-year US Treasury note ended close to a four-month high at 4.44 percent. The 10-year note's yield is used in setting mortgage rates, and higher rates may slow the purchasing of new homes. The Dow Jones index of home construction companies was at its lowest level since June. Fast-food chain McDonald's Corp climbed 2.7 percent, or 84 cents, to $32.14 after the Dow component said it posted a stronger-than-expected 4.9 percent gain in global July sales.
But shares of China's largest Web search company Baidu.com Inc, which more than quadrupled in value in their US market debut on Friday, fell 5.8 percent, or $7.04, to close at $115.50 on Nasdaq.
On the NYSE, about 1.36 billion shares changed hands, below last year's daily average of 1.46 billion, and on Nasdaq, 1.49 billion shares traded, below last year's daily average of 1.81 billion.
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