US stocks fell Monday amid concerns of a gloomy outlook for fourth-quarter corporate earnings, the future of the car industry and whether government efforts to revive the economy would succeed, dpa reported.
Monsanto Co lost 7.5 per cent after Goldman Sachs Group Inc said the recession would impact profits at the world's largest producer of seeds. Walgreen Co, the second-biggest US drugstore chain, slid 4.2 per cent after posting the slowest sales growth in 18 years. Walgreens said its first-quarter net income fell 11 per cent and it would limit store openings next year.
Stocks fell sharply in the afternoon, as oil prices plummeted to below 40 dollars a barrel, recovering shortly before the closing bell.
December and January are traditionally the best months for US stock markets, with the first month of the new year typically setting the tone for the rest of the year.
The markets have in the past performed better during the Christmas week - the Dow Jones Industrial Average has climbed an average 0.7 per cent at the holiday season, compared to a 0.1-per-cent advance for all four-day periods, Bloomberg financial news agency reported.
But the severe credit crunch has ensured that this is probably the worst holiday season in four decades. On Monday, Macys Inc, Tiffany & Co and JC Penney Co fell more than 5.7 per cent.
The blue-chip Dow fell 59.42 points, or 0.69 per cent, to 8,519.69. The S&P 500 shed 16.25 points, or 1.83 per cent, to 871.63. The technology-heavy Nasdaq Composite Index lost 31.97 points, or 2.04 per cent, to 1,532.35.
The US currency closed at 71.7 euro cents from 71.878 euro cents on Friday. The dollar closed at 90.239 yen from 89.395 yen on Friday.
Markets are to close early Wednesday and will be closed Thursday for the Christmas holiday.