NEW YORK (TheStreet) -- Stocks moved off session lows by midmorning Monday, though energy stocks continued to drag on benchmark indexes following a forecast from Goldman Sachs that the commodity will remain lower for longer than expected.

Crude oil for February delivery fell 3.7% on Monday to $46.55 a barrel. Among the investment banks cutting oil forecasts, Goldman Sachs analysts said crude would likely trade at $40 a barrel "for longer" as sector investment is curtailed and global demand-supply balance returned. Goldman said the benchmark New York rate would average $50.40 a barrel this year, far below its previous forecast of $83.75. 

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Also hurting crude prices, pleas from Venezuela and Iran for OPEC to cut oil output were ignored, the countries' delegates said Monday. OPEC's Gulf States, including Saudi Arabia, have been steadfast in their refusal to cut production lest the organization lose market share. OPEC will gather in June for their next scheduled meeting.

The S&P 500 fell 0.54%, the Dow Jones Industrial Average dropped 0.3%, and the Nasdaq tumbled 0.54%.

Energy stocks were being pummeled by lower oil prices on Monday with the Energy Select Sector SPDR ETF (XLE) - Get Report down 2.5%. Small-cap energy stocks were the worst performers with Bill Barrett (BBG) , Basic Energy Services (BAS) - Get Report , Sanchez Energy (SN) - Get Report , and Rex Energy (REXX)  suffering heavy losses.

Despite heavy selloffs early last week, benchmark indexes remain close to all-time highs. However, Goldman's chief U.S. equity strategist, David Kostin, said he believes a pullback from records could be seen at the end of February.

"The U.S. equity markets are likely to experience a pullback some time in the next 4-6 weeks and that would be pretty consistent with the magnitude of an extreme reading we see in the commodities futures trading corporation data," he told CNBC.

European markets were surging with stock markets in Germany and France more than 1% higher. Upward momentum has been strong over recent trading sessions on speculation over the quantitative easing measures that could be announced after the European Central Bank meets on Jan. 22.

Earnings season will begin in earnest after the bell with the unofficial kickoff from aluminum giant Alcoa (AA) - Get Report . The company received a pre-earnings upgrade from Nomura to "buy" on the continued benefit of downstream acceleration and other primary tailwinds.

The health care sector was moving higher in premarket trading as a number of pharmaceutical deals were announced. NPS Pharmaceuticals (NPSP) jumped more than 8% after drugmaker Shire (SHPG) - Get Report disclosed its agreement to purchase the mid-cap company for $5.2 billion, or $46 a share.

Switzerland-based Roche (RHHBY) announced it will acquire a majority of Foundation Medicine (FMI) - Get Report for more than $1 billion. Foundation has been developing gene-sequencing technology to identify tumors and suitable treatments. Foundation spiked 100%.

Biogen (BIIB) - Get Report was 1.2% higher after announcing a $675 million buyout of ConvergencePharmaceuticals, which has developed a portfolio of neuropathic pain treatments.

Tiffany (TIF) - Get Report was down 11.6% on negative holiday comparable-store sales and after the jewelry retailer lowered guidance. The company expects full-year profit as high as $4.20 a share, down from previous guidance of $4.30 at the high end.

Lululemon (LULU) - Get Report gained 6.5% after lifting its fourth-quarter earnings guidance to between 71 cents and 73 cents a share. The athletic apparel brand had previously forecast profit of 65 cents to 69 cents a share.

SanDisk (SNDK) plummeted more than 12% after it slashed fourth-quarter revenue guidance to $1.73 billion, down from analysts' consensus of $1.84 billion. Gross margins are expected to slip to 45%, below a previously guided range of 47% to 49%.

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--Written by Keris Alison Lahiff in New York.