NEW YORK (AP) — U.S. stocks fell on Monday as oil prices turned sharply lower and spooked investors into dumping shares of drillers and other energy-service companies.
The drop in oil weighed on stocks from the start of trading. Weak trade figures out of China and news that Japan's recession is deeper than initially thought suggested demand for crude would be lower in those two economies. Among the big losers were two Dow Jones industrial average components, Chevron, down 3.7 percent, and Exxon Mobil, off 2.3 percent.
More broadly, the six-month drop in oil, which has brought the price of crude down to the lowest level in five years, suggests headwinds for the U.S. economy, said Bill Strazzullo, chief market strategist at Bell Curve Trading.
"When you look at the major drivers of global growth — Japan, China and the eurozone — they're really struggling," he said. "Can the U.S. continue to grow at a moderate pace when the rest of the world is having major problems?"
Energy shares in the Standard and Poor's 500, a broader index than the Dow, dropped to their lowest level in nearly two years. The decline of 3.9 percent was by far the biggest percentage drop among the 10 sectors in the index. Six of the 10 sectors fell.
Selling was especially fierce in shares of smaller companies in the oil business. Cimarex Energy, Transocean, and Noble Energy were each down at least 5 percent.
The Dow lost 106.31 points, or 0.6 percent, to 17,852.48. The Standard & Poor's 500 index fell 15.06 points, or 0.7 percent, to 2,060.31. The Nasdaq composite fell 40.06 points, or 0.8 percent, to 4,740.69
Stocks have been rising steadily since mid-October. An encouraging jobs report on Friday showing the biggest burst in hiring in nearly three years helped push the S&P 500 to a record, capping a seven-week winning streak, its longest this year.
For its part, the Dow came within nine points of breaching 18,000 points on Friday, just five months after passing 17,000.
But troubles in Asia and falling stocks in Europe on Monday put that milestone further from reach.
In China, the world's No. 2 economy, the government reported that export growth fell sharply last month and imports unexpectedly contracted. The news followed figures showing China's economy growing at its slowest pace in five years.
In Japan, revised figures for the July-September quarter showed its economy shrank 1.9 percent, a bigger drop than previously estimated.
In Europe, German industrial production inched up 0.2 percent in October, less than expected. Europe's biggest economy is barely growing, up just 0.1 percent in the third quarter.
The news combined to push down benchmark crude 4 percent.
John Manley, chief stock strategist at Wells Fargo Funds, noted that there is an optimistic take on the oil slump. Falling oil means drivers saving money on filling their gas tanks, which could translate into people spending more in stores this holiday season.
"If Americans have a bit more money, they tend to spend more," Manley said.
Among other stocks making big moves:
—McDonald's, another Dow component, lost 3.8 percent. That was the biggest loss in the blue-chip index. Investors sold after learning that a key global sales figure slipped 2.2 percent in November. U.S. sales continued to fall and the company fought to recover from a food-safety scandal in China. Stock in the world's biggest hamburger chain sank $3.70 to $92.61.
— Merck & Co. agreed to pay $8.4 billion to buy Cubist Pharmaceuticals, a leader in developing drugs to fight so-called superbugs that have evolved to resist antibiotics. Cubist jumped $26.24, or 35 percent, to $100.60. Merck rose 39 cents, or 0.6 percent, to $61.88.
Benchmark crude oil dropped $2.79 to $63.05 a barrel in New York. Brent crude, which is used to price oil sold on international markets, dropped $2.88, or 4 percent, to $66.19 a barrel. Both prices are at their lowest levels since 2009.
In other energy futures trading:
— Wholesale gasoline dropped 6.68 cents to $1.707 a gallon
— Heating oil fell 5.29 cents to $2.055 a gallon
— Natural gas plunged 20.7 cents to $3.595 per 1,000 cubic feet.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.26 percent.
In metals trading, the price of gold rose $4.50 to $1,194.90 an ounce, silver inched up two cents to $16.28 an ounce, and copper fell two cents to $2.89 a pound.