NEW YORK: US stocks fell on Monday, dragged down by commodity-linked shares as crude prices fell to fresh 5-1/2 year lows and a strong dollar also weighed on metals prices.
Crude oil futures prices dropped to their lowest since May 2009 amid a global supply glut and lackluster demand. Russia's oil output hit a post-Soviet high last year, and Iraq's oil exports in December were highest since 1980.
The strength in the U.S. currency is putting even more pressure on dollar-denominated commodities. A measure of the greenback against a basket of major currencies hit its highest since December 2005.
The market fall is "driven quite a bit by the slump in energy prices," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey.
He said aside from the positive effect it has on consumers, the plunge in energy could have a negative effect in other sectors of the market.
"You also have a very strong dollar," he said. "Multinationals will have their earnings decreased if they aren't fully hedged."
At 9:55 a.m. EST (1355 GMT) the Dow Jones industrial average fell 182.03 points, or 1.02 percent, to 17,650.96, the S&P 500 lost 22.41 points, or 1.09 percent, to 2,035.79 and the Nasdaq Composite dropped 42.11 points, or 0.89 percent, to 4,684.70.
The S&P 500 energy sector was down 2.6 percent. It fell almost 20 percent over the last two quarters of last year.
Shares of Cempra Inc were up 9.2 percent at $24.99 after rising nearly 30 percent at one point in premarket. It moved closer to approval of its lead antibiotic, solithromycin, after an oral version of the potential blockbuster met the main goal in a late-stage trial.
Declining issues outnumbered advancing ones on the NYSE by 2,274 to 572, for a 3.98-to-1 ratio; on the Nasdaq, 1,678 issues fell and 704 advanced for a 2.38-to-1 ratio favoring decliners.
The S&P 500 was posting 5 new 52-week highs and 6 new lows; the Nasdaq Composite was recording 22 new highs and 9 new lows.
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