U.S. Stocks Erase Gains to Close With Losses

Johnson said that speculative money has largely left the oil trade. "This group ... went from being net long to net short in about a week or so," he said. "The speculators are the first ones out. Now everybody else is going to get out." He said that the decline in oil prices will benefit equities as money that had sat on the sideline or been in commodities will need to find another place to go.

As for corporate news, Internet company Google (GOOG Quote) said it will develop its own Web browser, called Chrome, in an effort to compete with Microsoft (MSFT Quote). Google ended the day up 0.4% at $465.25, and Microsoft was down 0.7% to $27.10.

Elsewhere in technology, Alcatel-Lucent (ALU Quote) appointed Ben Verwayyan, former head of BT Group, as its new CEO. Alcatel-Lucent also selected Philippe Camus to be its nonexecutive chairman. Shares slumped 4.7% to $5.89.

In another shakeup, Ford (F Quote) appointed Stephen Odell to head up its Volvo brand. Odell replaces Frederik Arp. Its stock added 1.1% to $4.51.

On the M&A front, Chesapeake Energy (CHK Quote) and BP's (BP Quote) American business announced a deal that would give BP 25% interest in Chesapeake's Fayetteville Shale development for $1.9 billion. Chesapeake declined 6.5% to $45.24, and BP lost 6.3% to $54.01.

Shares of Sciele Pharma (SCRX Quote) were rising after Japanese company Shionogi said it would buy the drugmaker for $1.1 billion. The stock rose 59% to $30.67.

Meanwhile, a Korea Development Bank executive confirmed the bank is holding discussions to buy a stake in struggling brokerage Lehman Brothers (LEH Quote), adding fuel to recent reports of a possible buyout. Lehman ended the day up 0.3% at $16.13.