Weak Oil Prices, China Worries Drag Wall Street Lower

Wall Street ended lower on Monday as tumbling oil prices dragged energy shares to a three-year low and factory data from China raised concerns about the world's second-biggest economy.

Energy stocks were the biggest losers among the main S&P sectors. Exxon Mobil and Chevron, which reported poor results on Friday, led the losses.

Oil prices fell on fresh evidence of growing oversupply and data highlighting slowing demand in China. Crude prices are on course for their weakest third-quarter performance since the financial crisis in 2008.

In the United States, consumer spending recorded its smallest gain in four months, while the pace of growth in the manufacturing sector slowed in July.

China's factory activity shrank more than initially estimated last month, a survey showed. Concerns about China's economy hurt US industrial stocks as well as Apple, which relies on that country for much of its iPhone sales.

A report from market research firm Canalys showed Apple lost some smartphone market share in China in the second quarter. Its stock fell 2.36 percent, weighing most on the Nasdaq and the S&P 500.

The company's shares slipped below their 200-day daily moving average, a key technical level closely watched by traders, for the first time in nearly two years.

"It's a combination of the energy stocks, then the industrials and now the tech stocks, which have joined on the downside," said Donald Selkin, chief market strategist at National Securities in New York, which has about $3 billion in assets under management.

The Dow Jones industrial average fell 0.52 per cent to end at 17,598.2. The S&P 500 lost 0.28 per cent to 2,098.04 and the Nasdaq Composite dropped 0.25 per cent to 5,115.38.

Half of the 10 major S&P sectors were lower, with the energy index falling 2.01 per cent to its lowest level since 2012.

After the bell, shares of Tenet Healthcare rose 2.3 per cent as the company's second-quarter report pleased investors.

Tyson Foods shares fell 9.9 per cent during Monday's session after the biggest US meat processor cut its profit forecast for the year, citing export market disruptions in its beef business and high cattle costs.

Peabody Energy fell 9.17 per cent as President Barack Obama prepared to unveil the final version of his plan to tackle greenhouse gases from coal-fired power plants.

Declining issues outnumbered advancing ones on the NYSE by a 1.54 to 1 ratio on the downside. On the Nasdaq, that ratio was 1.73 to 1 ratio favouring decliners.

The S&P 500 index posted 23 new 52-week highs and 26 new lows; the Nasdaq Composite posted 78 new highs and 141 new lows.

Some 6.5 billion shares changed hands on US exchanges, below the five-day average of 7.1 billion this month, according to BATS Global Markets.