WASHINGTON (dpa-AFX) - Stocks moved mostly lower during trading on Monday, extending the pullback seen over the course of last Friday's session. The major averages regained some ground in the latter part of the trading day but still closed in negative territory.
The Dow slid 374.09 points or 0.7 percent to 53,185.90, while the S&P 500 fell 25.62 points or 0.3 percent to 7,686.14. The tech-heavy Nasdaq posted a more modest loss, edging down 31.53 points or 0.1 percent to 26,370.89.
The continued weakness on Wall Street came amid concerns about a re-escalation of the military conflict in the Middle East following a period of relative calm.
Over the weekend, the U.S. and Iran traded strikes for the first time in over a month, contributing to a jump in crude oil prices.
U.S. crude oil futures have surged by more than 3 percent after the U.S. attacked two Iranian rocket launchers on Larak Island and Iran retaliated by launching an attack on two U.S. bases in Jordan.
The sharp increase in crude oil prices contributed to renewed worries about the outlook for inflation ahead of next month's Federal Reserve meeting.
According to CME Group's FedWatch Tool, the chances the central bank will raise interest rates by a quarter point have jumped to 63.9 percent following Fed Chairman Kevin Warsh's hawkish remarks last Friday.
Treasury yields subsequently moved notably higher on the day, with the yield on the benchmark ten-year note reaching its highest levels in well over a year.
However, traders seemed somewhat reluctant to make more significant moves ahead of the release of some key economic data in the coming days, including the monthly jobs report on Friday.
Sector News
Airline stocks moved sharply lower amid the surge in crude oil prices, dragging the NYSE Arca Airline Index down by 3.2 percent to its lowest closing level in over three months.
Interest rate-sensitive housing and utilities stocks also saw considerable weakness, with the Philadelphia Housing Sector slumping by1.9 percent and the Dow Jones Utility Average falling by 1.4 percent.
Gold and retail stocks also showed significant moves to the downside, while energy stocks moved notably higher along with the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both edged down by 0.1 percent, while China's Shanghai Composite Index increased by 0.9 percent.
Meanwhile, European stocks moved mostly lower on the day, with the U.K. markets closed for a bank holiday. While the German DAX Index slumped by 1.2 percent, the French CAC 40 Index slid by 0.8 percent.
In the bond market, treasuries moved notably lower amid the surge in crude oil prices. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 3.8 basis points to 4.758 percent.
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