US stocks slumped on Monday after oil prices hit their highest level in nearly a month and investors sold retail and semiconductor shares on concerns about profitability, cashing in on a recent run-up in prices.
Crude oil prices topped $60 a barrel for the first time since November 9, fuelled by expectations that cold weather in the US Northeast would boost demand. High energy costs, which cut into consumer spending and corporate profits, remained a concern for investors. US crude for January delivery rose 93 cents at $60.25 a barrel.
The Dow Jones industrial average was down 31.54 points, or 0.29 percent, at 10,845.97. The Standard & Poor's 500 Index was down 2.50 points, or 0.20 percent, at 1,262.58. The technology-laced Nasdaq Composite Index was down 14.23 points, or 0.63 percent, at 2,259.14.
Higher oil prices also stoked concerns raised in the Federal Reserve's "beige book" summary of economic conditions on Friday that higher energy costs could cause more inflation and a decline in consumer spending.
"The market had such a big run recently ... it's nervous and prone to look for a little profit-taking. So when you get any sort of headline trigger, it moves stocks lower, and I think oil is it," said Chip Hanlon, president of Delta Global Advisors Inc in Huntington Beach, California.
Hurting the Nasdaq, shares of chipmakers fell after hitting their highest level in more than a year and a half on Friday. The Philadelphia Stock Exchange's Semiconductor Index fell 1.4 percent as investors worried about profits in the sector despite strong sales volume, said Joseph Battipaglia, chief investment officer of Ryan, Beck & Co, a brokerage and research firm. "The volume is there, but, of course, the prices are still not extraordinarily robust," he said.
Shares of Intel Corp fell before a midquarter update from Intel on the revenue and profit outlook on Thursday. Intel shares were off 1.8 percent at $26.92 after a run-up last week.
Retailers fell on lingering concerns about holiday sales profits. Shares of Wal-Mart Stores Inc fell 1.1 percent to $47.46, while Home Depot Inc shares fell 0.5 percent to $41.48.
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