US stocks dropped on Monday after crude oil climbed to a record high, raising worry among investors that energy costs may squeeze corporate profit growth. Rising oil prices are generally negative for stocks, as they raise companies' expenses and eat into consumers' discretionary spending.
Light, sweet crude futures for July delivery rose 28 cents to $58.75 on the NYMEX market, while August futures briefly touched the $60 mark before easing to $59.40.
"Any time you get oil between $55 and $60 it is going to put a damper on the market," said John O'Donoghue, CSFB managing director of listed trading in New York.
Market anxiety over oil exports from producer nations resurfaced after the United States, Britain and Germany closed their consulates in Nigeria's largest city Lagos due to a threat from foreign Islamic militants.
The Dow Jones industrial average was down 33.83 points, or 0.32 percent, at 10,589.24. The Standard & Poor's 500 Index was down 3.07 points, or 0.25 percent, at 1,213.89. The technology-laced Nasdaq Composite Index was down 3.52 points, or 0.17 percent, at 2,086.59.
Shares of Boeing Co fell after Air Canada, a unit of ACE Aviation Holdings Inc, said it cancelled a $6 billion order from the Dow component company. Boeing shares were off 1.3 percent at $63.79.
EBay Inc shares were down 3.2 percent at $36.85 on a Wall Street Journal report that Google Inc may offer an "online wallet" service that rivals eBay's PayPal. Google shares were down 1.4 percent at $276.46.
Shares of Cablevision Systems Corp rallied 21.88 percent at $32.75, after the Dolan family, which owns 71 percent of the company's voting shares, made a $7.9 billion bid to take the enterprise private.
A key gauge on the future direction of the US economy dropped 0.5 percent last month, resuming a slide that began in January after a standstill in April, the New York-based Conference Board said.
Wall Street economists had expected a decline of 0.3 percent.
GM was up 10 cents at $35.78. Both trade on NYSE. Ford Motor Co was also upgraded but its shares fell 15 cents to 11.13.