US stocks declined on Monday after the price of crude oil rebounded, briefly hitting a one-month high above $60 a barrel and pushing shares of retailers and industrial companies lower, while semiconductors fell on concerns about profits.
Discount retailer Wal-Mart Stores Inc and diversified manufacturer 3M Co were among the heaviest drags on the blue chip Dow average. Investors worried that a return of soaring oil prices will hurt spending by consumers and raise costs for industrial companies, which are heavy energy users.
In the semiconductor group, Intel Corp sank after hitting its highest level in more than 1 1/2 years on Friday. The Philadelphia Stock Exchange's Semiconductor Index fell 1.6 percent as investors worried about profits in the sector despite strong sales volume, said Joseph Battipaglia, chief investment officer of Ryan, Beck & Co.
"The volume is there, but, of course, the prices are still not extraordinarily robust," he said.
The Dow Jones industrial average was down 42.50 points, or 0.39 percent, at 10,835.01. The Standard & Poor's 500 Index was down 3.00 points, or 0.24 percent, at 1,262.08. The technology-laced Nasdaq Composite Index was down 15.73 points, or 0.69 percent, at 2,257.64.
Shares of heavily weighted Intel fell 1.9 percent to $26.90, helping to knock the Nasdaq down from Friday's 4 1/2 year high.
Other chip makers slumped, including Altera Corp, down 4.2 percent to $18.30 and Xilinx Inc, down 3.3 percent to $26.46.
US crude for January delivery rose 59 cents to settle at $59.91 a barrel. Earlier it hit $60.80 on expectations that cold weather in the US Northeast would boost demand. Oil was last above the $60-level on November 9.
"That's what's spooking people. If oil stays up around here, we have a chance to have a decent market," said Warren Simpson, managing director at Stephens Capital Management. "But if it gets back to $70 it will really start working on the market, or even at $65 people will get nervous, especially if it's a harsh winter.
Shares of 3M fell 1.4 percent to $78.32, while heavy equipment maker Caterpillar Inc slipped 0.8 percent to $58.33.
Retailers fell on lingering concerns about holiday sales. Wal-Mart Stores Inc fell 1.7 percent to $47.14, while shares of rival Target Corp lost 2.3 percent to $52.61. Federated Department Stores Inc shares lost 2.2 percent to $65.16.
"It's going to be a choppy holiday season for retailers," said John Caldwell, chief investment strategist at McDonald Financial Group. "There will be haves and have-nots depending on where consumers' tastes lie for the season."
Among the biggest gainers on the S&P 500 were energy shares which benefited from the jump in crude prices. ConocoPhillips stock climbed 0.9 percent to $62.96, while Exxon Mobil Corp shares rose 0.7 percent to $59.51.
Boston Scientific Corp said it was offering to buy Guidant Corp for about $25 billion in cash and stock, topping an offer from Johnson & Johnson.
Shares of Boston Scientific fell 3.6 percent to $26.35, while Guidant shares shot up 10 percent to $67.98, the biggest percentage gain on the S&P 500. Shares of Johnson & Johnson shares dipped 0.3 percent to $61.05.
Trading was heavy on the NYSE, with about 1.69 billion shares changing hands, above last year's daily average of 1.46 billion, while on Nasdaq, about 1.69 billion shares traded, below last year's daily average of 1.81 billion.
Declining stocks outnumbered advancing ones by a ratio of to 3 to 2 on the NYSE and by 5 to 3 on Nasdaq.
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