U.S. stocks sink as energy shares tank

NEW YORK - Stocks retreated Monday, led by a slump in energy stocks after the price of crude oil sank again.

Exxon Mobil and Chevron were among the biggest decliners in the Dow Jones industrial average Monday. McDonald's, another Dow component, fell 4 percent after reporting that a measure of global sales fell last month.

The Dow lost 106 points, or 0.6 percent, to close at 17,852.The Standard & Poor's 500 index fell 15 points to 2,060. The Nasdaq composite fell 40 points, or 0.8 percent, to 4,740.

Benchmark crude oil dropped $2.79, or 4 percent, to $63.05 a barrel in New York, its lowest price in five years. Bond prices rose. Energy shares in the S&P 500 dropped 4 percent, by far the biggest loss among the 10 sectors in the index.

The yield on the 10-year Treasury note fell to 2.26 percent.

Weak Chinese trade figures and news that Japan's recession is deeper than initially thought also weighed on markets.

Two big energy companies in the Dow, Chevron (CVX) and Exxon Mobil (XOM), fell sharply. Chevron lost $4.07, or 3.7 percent, to $106.80, and Exxon Mobil fell $2.12, or 2.3 percent, to $91.70.

McDonald's (MCD), another Dow component, lost 3.8 percent. That was the biggest in the blue-chip index. Investors sold after learning that a key global sales figure fell 2.2 percent in November, as U.S. sales continued to fall and as the company fought to recover from a food-safety scandal in China. Stock in the world's biggest hamburger chain fell $3.70 to $92.71.

Merck & Co. (MRK) agreed to pay $8.4 billion to buy Cubist Pharmaceuticals (CBST), a leader in developing drugs to fight so-called superbugs that have evolved to resist antibiotics. Cubist jumped $26.32, or 35 percent, to $100.68. Merck rose four cents, or 0.1 percent, to $61.53.

In China, the world's No. 2 economy, export growth slumped last month and imports unexpectedly contracted. In Japan, revised figures for the July-September quarter showed the economy shrank 1.9 percent.

Bill Strazzullo, chief market strategist at Bell Curve Trading, said overseas weakness may be weighing on U.S. markets.

"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?"

In Europe, France's CAC 40 and Britain's FTSE 100 were down 1 percent each. Germany's DAX fell 0.7 percent.

The dollar was mixed. The euro inched up 0.5 percent to $1.2336 while the dollar fell 0.5 percent to 120.89 yen. U.S. government bond prices rose slightly. The yield on the 10-year Treasury note fell to 2.25 percent from 2.31 percent on Friday.

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.