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Stocks slide as commodities rout continues

U.S. stocks declined on Monday -- kicking off another month after the S&P 500 gained 2 percent in July -- as energy shares were knocked along with the price of oil and investors mulled corporate earnings from companies including Tyson Foods.

Economic reports showed the U.S. economy lost some of its steam at the end of the second quarter.

"The economic data was a little bit disappointing," Randy Frederick, director of trading and derivatives at the Schwab Center for Financial Research, said. "Earnings have been a mixed bag -- relative to expectations they've been really good, but it's from cutting costs and buying back shares. Earnings are only up about 1 percent year over year. We're blowing away the targets, but the targets were set really low."

Tyson Foods (TSN) fell sharply after the nation's largest meat processor reduced its earnings outlook, citing high cattle prices.

Peabody Energy (BTU) lost ground as President Obama readied to announce the final version of his plan to fight greenhouse gases from coal-burning power plants.

Exxon Mobil (XOM) and Chevron (CVX) dropped as the price of crude fell to a six-month low amid data illustrating slowing demand in China. Both companies reported weak results on Friday.

Major indices came off session lows, but still closed in the red. The Dow Jones Industrial Average (DJI) was fell 92 points, or 0.5 percent, at 17,598. The S&P 500 (SPX) shed nearly 6 points, or 0.3 percent, at 2,098. The Nasdaq Composite (COMP) fell 13 points, or 0.3 percent, to 5,115.

U.S. households continued to spend in June, but the gain was the smallest in four months. Incomes rose 0.4 percent for a third month, while another report had the Institute for Supply Management's index falling in July from a June showing that was the most rapid since the start of the year.

"The PCE (Personal Consumption Expenditures) is critical for the Federal Reserve to raise rates, that's the preferred inflation gauge, so that throws the concept of a September rate increase into question again," Frederick said.

On Friday, the nonfarm payrolls report is slated for release, with the Fed waiting for signals of further improvement in the jobs market as it looks to raise interest rates. Fed Chair Janet Yellen last month reiterated that she anticipates the Fed will hikes its benchmark rate in 2015, while stressing the rate of the hikes would be gradual.