US close: Stocks drop as investors scale back risk appetite

(Sharecast News) - US stocks fell sharply on Monday with the Dow pulling back from record highs as investors adopted a cautious approach ahead of the third-quarter earnings season, while oil prices surged on the back of the ongoing conflict in the Middle East.

The Dow Jones Industrial Average declined 0.94% to 41,954.24, with just five of the index's 30 constituents finishing in positive territory. The benchmark surged to a new closing high of 42,352.75 on Friday following a bumper jobs report for September, which showed that the American economy created significantly more jobs than expected.

Meanwhile, the S&P 500 dropped 0.96% while the Nasdaq fell 1.18%.

No major corporate earnings were slated for release on Monday, but traders were patiently awaiting the beginning of Q3 earnings season later in the week, with heavyweights PepsiCo, JPMorgan, Wells Fargo and BlackRock all set to report over the coming days.

Also dampening risk appetite were oil prices as fighting continued in the Middle East. West Texas Crude was up nearly 4% at $77.29 a barrel by the end of play, rising to levels not seen since late-August, reigniting fears about inflation.

Stephen Innes, managing partner at SPI Asset Management, said there are "real concerns that the escalating conflict could imperil Iran's 3.4m barrels per day of production and threaten significant disruptions along the world's key oil supply artery-the Strait of Hormuz".

He added: "What was once a market fixated on oversupply risks is now grappling with the potential for a supply squeeze that could skyrocket prices. The stakes are high, and the geopolitical tension has traders on edge, bracing for more volatility in the coming weeks."

Market movers

Technology and aerospace manufacturer Barnes Group rose 3% to $46.48 on the news that it has agreed to be bought by Apollo Global Management for $3.6bn in cash.

Under the terms of the agreement, Barnes shareholders will receive $47.50 per share in cash, which is a premium of about 22% the undisturbed closing share price on 25 June. The stock, which surged 13% on Friday, was trading around the $40 level at the start of last week.

Also rising on M&A news was Arcadium Lithium after Rio Tinto confirmed speculation that it has approached the Philadelphia-based lithium chemicals producer regarding a possible takeover. The stock finished up 35%.

Drugmaker giant Pfizer rose 2% on a CNBC report that activist investor Starboard Value has built a $1bn stake in the firm and is pushing for a turnaround of the company.

Dow Jones - Risers

Walgreens Boots Alliance, Inc. (WBA) $8.87 1.72% Boeing Co. (BA) $155.91 0.59% International Business Machines Corporation (CDI) (IBM) $227.12 0.50% Caterpillar Inc. (CAT) $398.25 0.29% Chevron Corp. (CVX) $151.12 0.25%

Dow Jones - Fallers

Travelers Company Inc. (TRV) $225.83 -4.34% Walt Disney Co. (DIS) $92.39 -2.90% Walmart Inc. (WMT) $79.10 -2.27% Apple Inc. (AAPL) $221.69 -2.25% Nike Inc. (NKE) $80.85 -1.73% Coca-Cola Co. (KO) $69.00 -1.65% Microsoft Corp. (MSFT) $409.54 -1.57% Visa Inc. (V) $273.79 -1.49% Dow Chemical Co. (DOW) $54.62 -1.30% Unitedhealth Group Inc. (UNH) $583.51 -1.29%

S&P 500 - Risers

Air Products & Chemicals Inc. (APD) $312.52 9.52% Coty Inc. Class A (COTY) $9.36 4.12% Flowserve Corp. (FLS) $54.58 3.59% Helmerich & Payne Inc. (HP) $35.43 3.32% Diamondback Energy Inc. (FANG) $199.50 2.51% Albemarle Corp. (ALB) $104.47 2.33% Nvidia Corp. (NVDA) $127.72 2.24% Pfizer Inc. (PFE) $29.19 2.17% Walgreens Boots Alliance, Inc. (WBA) $8.87 1.72% MGM Resorts International (MGM) $41.10 1.66%

S&P 500 - Fallers

Everest Group (EG) $372.55 -8.47% CenturyLink Inc. (LUMN) $6.23 -8.11% VF Corp. (VFC) $19.83 -6.90% Foot Locker Inc. (FL) $22.66 -6.01% Assurant Inc. (AIZ) $186.61 -5.53% Allstate Corp (The) (ALL) $181.23 -4.89% Chubb Corp. (CB) $277.18 -4.61% Mosaic Company (MOS) $25.71 -4.42% Travelers Company Inc. (TRV) $225.83 -4.34% NextEra Energy Inc. (NEE) $80.29 -4.25%

Nasdaq 100 - Risers

Baidu Inc. (BIDU) $114.47 3.63% Nvidia Corp. (NVDA) $127.72 2.24% Walgreens Boots Alliance, Inc. (WBA) $8.87 1.72% Sirius XM Holdings Inc (SIRI) $23.12 1.72% Paypal Holdings Inc (PYPL) $80.26 1.13% Wynn Resorts Ltd. (WYNN) $106.41 0.91% eBay Inc. (EBAY) $66.77 0.72% Micron Technology Inc. (MU) $102.91 0.65% Take-Two Interactive Software Inc. (TTWO) $152.21 0.34% Vodafone Group Plc ADS (VOD) $9.69 0.31%

Nasdaq 100 - Fallers

Qurate Retail Inc. (QRTEA) $0.63 -7.53% Adobe Systems Inc. (ADBE) $487.30 -3.93% Ross Stores Inc. (ROST) $140.12 -3.75% Tesla Inc (TSLA) $240.83 -3.70% Monster Beverage Corp (MNST) $49.24 -3.36% Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $370.01 -3.09% Amazon.Com Inc. (AMZN) $180.80 -3.06% DENTSPLY Sirona Inc. (XRAY) $24.48 -2.93% Workday, Inc. (WDAY) $235.47 -2.84% NetEase Inc. Ads (NTES) $99.55 -2.72%