Oil prices lead US stocks lower

NYSE traders Image copyright Getty Images

(Closed): Wall Street markets sank on Monday, as oil prices dropped 2% to three-month lows and investors remained wary ahead of a raft of quarterly earnings reports.

The Dow Jones Industrial Average was down 77.79 points at 18493.06.

The broader S&P 500 index fell 6.55 points to 2168.48, while the Nasdaq slipped 2.35 to 5097.63.

The price of US crude fell 2.6% to $43.04 a barrel, its lowest level since April, while Brent crude slid 2.3%.

The drop in crude sent shares of US oil producers tumbling.

Exxon Mobile shares fell 1.9% and Chevron fell 2.5%.

Shares of Verizon and Yahoo both slipped after it was announced that the US telecoms giant would buy Yahoo's core internet business for $5bn.

Verizon Communications fell 0.4% and Yahoo shares were down 2.7%.

Kimberly-Clark, the maker of household goods including Kleenex tissues and Huggies diapers, fell 1.5% after reporting disappointing results.

Retail stocks were some of the day's top performers. Department store Nordstrom climbed 4.6% and Gap shares rose 3.5%.

Investors are preparing themselves for more earnings results released this week. Tuesday will be focused on Verizon in the morning and Apple and Twitter after US trading closes.

On Wednesday, the Federal Reserve announces whether it will raise its benchmark interest rate. However, most investors believe the Fed will leave rates unchanged.