The Dow Jones Industrial Average ($INDU) lost 80 points, or 0.7%, to close at 12,090. The blue-chip index was off as much as 128 points during the session before paring its loss. The tech-heavy Nasdaq Composite ($COMPX) fell 39 points, or 1.4%, to finish at 2,746. The broader S&P 500 ($INX) dropped 11 points, or 0.8%, to close at 1,310, hurt by tech stocks and the materials sector.
Chip-maker Intel (INTC) was among the Dow's worst performing components after analysts at Wells Fargo (WFC) cut its rating on the semiconductor sector to market weight from overweight. Tech stalwarts International Business Machines (IBM) and Cisco Systems (CSCO) also weighed on the blue chips.
Oils Approaches $107 a Barrel
Escalating violence in North Africa sent oil prices close to $107 a barrel at one point in Monday trading. Western allies are weighing military options against Libya, including a no-fly zone over the country, after forces loyal to Moammar Gadhafi unleashed air assaults against rebels fighting his regime.
Sustained high oil prices threaten corporate profit margins and consumer spending. The International Air Transport Association recently cut its profit outlook for airlines this year to $8.6 billion, down 46% from last year. As for pain at the pump, a gallon of regular gas climbed to $3.503 on Sunday -- nearly 38 cents higher than a month ago and up 15 cents in a week, according to AAA, which posts gas prices daily.
Safety in Gold
Traders also fled stocks for the perceived safety of gold. Gold futures rose $5.90, or 0.4%, to settle at $1,434.50 an ounce on the Comex. The yellow metal hit an intraday high of $1,445.70 an ounce. Last week the precious metal set a new record close of $1,437.70 an ounce, not adjusted for inflation.
In other corporate news, shares of Dow component Boeing (BA) declined after competitor Airbus raised its demand forecast for the Asia-Pacific region. In a rare patch of green Monday, shares in Western Digital (WDC) rallied sharply after the world's largest maker of hard drives is buying Hitachi Global Storage Technologies, the third largest, for $4.3 billion in cash and stock.