Washington: U.S. stocks extended their recent slide on Monday with declines in biotechs and energy shares, while caution ahead of earnings season also weighed on the market.
The S&P energy sector <.SPNY> dropped 2.8 percent following another sharp drop in oil prices. The health sector <.SPXHC> was down 2.1 percent, while the Nasdaq Biotech index <.NBI> fell 4.8 percent, on track for its eighth straight down day.
The declines add to the early year losses. Last week, stocks had their worst five-day start to a year ever following mounting investor concerns about declining oil prices and a China-led slowdown in global growth. Celgene fell 7.5 percent to $100.77 and McKesson dropped 10.5 percent to $163.15.
Both companies gave disappointing profit forecasts. "It is a little discouraging. I was hoping the worst was behind us, but earnings kick off this week, and there must be some jitters about committing money in front of these reports after the news coming out of China," said Daniel Morgan, senior portfolio manager at Synovus Trust Company in Atlanta.
At 3:15 p.m., the Dow Jones industrial average <.DJI> was down 74.95 points, or 0.46 percent, to 16,271.5, the S&P 500 <.SPX> lost 14.94 points, or 0.78 percent, to 1,907.09 and the Nasdaq Composite <.IXIC> dropped 53.62 points, or 1.15 percent, to 4,590.01.
Exxon and Chevron were both off nearly 2 percent on weak oil prices. Exxon was the biggest drag on the S&P. Among materials stocks, Freeport-McMoRan tumbled 17 percent, while Caterpillar and DuPont were down nearly 3 percent, weighing the most on the Dow.
Alcoa , down 0.5 percent at $8.04, is scheduled to report fourth-quarter results after the close, unofficially starting the earnings season. The aluminium producer`s performance is regarded as a barometer for other materials and industrial companies.
Energy and materials companies are expected to be main drivers behind U.S. corporate earnings moving into a recession - two quarters of falling profits - in the fourth quarter. Overall, quarterly corporate earnings are expected to have declined 4.2 percent from a year ago, according to Thomson Reuters data.