NEW YORK (TheStreet) -- Stock markets were gripped by volatile trading Monday after OPEC doubled-down on its commitment to current levels of oil production, triggering a fresh selloff in crude prices.

The S&P 500 moved off session lows, down 0.38%  by early afternoon. The benchmark index traded below the 2,000 level for the first time since Oct. 30 after suffering its worst week in more than two years last week. The Dow Jones Industrial Average fell0.34%, and the Nasdaq was down 0.8%.

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Crude oil prices were falling again after secretary general of OPEC, Abdallah Salem el-Badri, said the oil cartel had not set a fixed oil-price target. Separately, United Arab Emirates oil minister Suhail Al-Mazrouei said the group would stick to production levels even if oil falls to $40 a barrel. 

West Texas Intermediate crude was 3.3% lower to $55.89 a barrel. The International Energy Agency on Friday cut its forecast for oil demand in 2015 by 230,000 barrels a day to 900,000 barrels. It's the fifth time in six months the IEA has slashed its forecast.

"The much lower price environment for oil and other commodity prices will eventually cause equipment investment to slow in industries related to oil extraction, in our view," said Wells Fargo economists in a note. "However, we have maintained that [industrial] production would still hold up in the near term." 

Industrial production in the U.S. in November rose 1.3%, its largest increase in nine months, compared to an estimated 0.7% increase. October data on industrial production was upwardly revised to 0.1%.

The most recent selloff could also be a factor of nervousness ahead of the Federal Reserve's two-day meeting which kicks off Tuesday. "I think it likely that last week's adjustment to equity prices had, not only to do with crashing prices for Crude, but also a little something to do with anticipation of a change in Fed language," said economist Stephen Guilfoyle in a blog post.

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The central bank is expected to remove its longstanding pledge to keep interest rates at near zero for a "considerable time." The Fed also is expected to raise interest rates as soon as the second quarter next year after years at an artificially low level.

PetSmart (PETM) shares spiked more than 4% on news it had agreed to be acquired by a group of private-equity investors led by BC Partners. The acquisition is valued at $8.7 billion, or $83 a share.

Oracle (ORCL) - Get Report shares added 3.4% after Morgan Stanley analysts raised their rating on the stock to "overweight" on "low expectations and weak sentiment" heading into the company's earnings report on Wednesday.

Riverbed Technology (RVBD) climbed 8.1% on news it will be acquired by Thoma Bravo and the private-equity branch of the Ontario Teachers' Pension Plan for $3.6 billion, or $21 a share, a 12% premium to the tech company's Friday close.

Ford (F) - Get Report shares were the worst performers of the S&P 500, down 4.3%, after Deutsche Bank downgraded the automaker to "hold." Analysts said they grow more cautious as the domestic auto industry enters its sixth year of recovery.

Cirrus Logic (CRUS) - Get Report surged 19.9% as Barclays upgraded the stock to "overweight" and more than doubled its price target to $28. The firm believes the company's chips will be increasingly used in current iPhones and future models of the Samsung Galaxy.

Talisman Energy (TLM) rocketed 18.4% higher after confirming discussions with Repsol, among others, for a potential transaction. Canada Pension Plan Investment Board is also exploring a bid, Bloomberg reported.

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-- Written by Keris Alison Lahiff in New York.