Stocks retreated from record highs on Monday as a selloff in health care overshadowed a rally in energy.
The S&P 500 was down 0.09%, the Dow Jones Industrial Average fell 0.08%, and the Nasdaq slid 0.15%.
Bristol-Myers Squibb(BMY) - Get Report led the health care sector lower on Monday after Credit Suisse cut its rating to neutral from outperform. The drug company slumped on Friday in the second-biggest one-day drop in its history after disappointing trial results for a highly anticipated lung cancer treatment.
Fellow health care stocks moved lower alongside Bristol-Myers. AbbVie(ABBV) - Get Report , Amgen(AMGN) - Get Report , Pfizer(PFE) - Get Report , Merck(MRK) - Get Report and Novartis(NVS) - Get Report were all lower on Monday, while the Health Care Select Sector SPDR ETF (XLV) - Get Report fell 0.9%.
A rally in crude oil helped to keep overall market losses shallow on Monday. Crude spiked on reports some members of the Organization of the Petroleum Exporting Countries, including Ecuador, Kuwait and Venezuela, are pushing for a production freeze amid a global supply glut. The cartel will hold an informal meeting at the end of September.
"Many OPEC members are likely to be in favor of the freeze, but any meaningful action would require coordination from members with more significant upside to current production (principally Iran and Libya)," said Robbie Fraser, commodity analyst at Schneider Electric. "If the last round of talks is any indication, this latest revival is likely to be high on speculation and relatively weak on substance."
West Texas Intermediate crude oil, the U.S. benchmark, settled 2.58% higher at $42.88 a barrel on Monday, its best close since July 25.
The energy sector was the best performer on markets Monday. Major oilers including Exxon Mobil(XOM) - Get Report , Chevron(CVX) - Get Report and ConocoPhillips(COP) - Get Report were higher, while the Energy Select Sector SPDR ETF (XLE) - Get Report added 1.4%.
Stocks secured new records Friday after the latest labor market snapshot breezed past expectations, providing evidence for the U.S. economic recovery. The S&P 500 scored an all-time record close of 2,182.86, while the Nasdaq climbed to a record close of 5,221.12, its first since July last year.
The better-than-expected jobs report on Friday raised the chances of a rate hike from the Federal Reserve come September. The likelihood of a rate hike next month currently lies at 18%, according to CME Group fed funds futures. The December meeting has a higher likelihood at 40%.
"Officials toned down their assessment of global risks in July and several are publicly anxious to get back on the normalization track," DBS Group analysts wrote in a note. "Two monster payrolls reports and accelerating core inflation and wage growth will give their arguments a lot of weight."
In deal news Monday, Walmart(WMT) - Get Reportconfirmed it would buy online retailerJet.com for roughly $3 billion. Jet.com set out to compete with the likes of Amazon(AMZN) - Get Report by offering deals on home goods such as diapers and cleaning supplies. The deal is the largest ever for an e-commerce company. Walmart said it will maintain Jet's brand.
Mattress Firm (MFRM) rocketed more than 100% higher after Steinhoff International Holdings (SNHFY) agreed to a deal worth $3.8 billion, including debt. Steinhoff offered $64 a share in cash, a deal which both boards unanimously approved. The acquisition represents a 115% premium to Mattress Firm's close on Friday.
Netflix(NFLX) - Get Report slid after Alibaba(BABA) - Get Report dismissed deal rumors. Speculation swirled on Friday that the Chinese e-commerce company could take an investment in the streaming service.
Delta Airlines(DAL) - Get Report rebounded from heavy losses after flights began to resume operating as normal after a system-wide computer glitch left thousands of passengers stranded. The airline said it had cancelled 450 flights as of mid-afternoon and could delay or cancel even more. The glitch affected flights at airports as wide-ranging as Los Angeles, Tokyo and London.
In earnings news, Sotheby's(BID) - Get Report shot upwards after revenue fell far less than anticipated. Weaker sales were expected given lower agency commissions and a softer art market over the quarter.
Dean Foods(DF) - Get Report slipped after recording another quarter of declining sales, its sixth quarter in a row. Revenue fell 8.2% to $1.85 billion, matching consensus. Lower raw milk costs helped to drive profit higher, though. Adjusted earnings increased to 38 cents a share from 33 cents a share a year earlier.
Allergan(AGN) - Get Report moved lower despite earnings coming in higher than expected. The biotech company earned an adjusted $3.35 a share, 2 cents above estimates. Revenue climbed to $3.68 billion but missed estimates of $3.97 billion. Full-year earnings guidance of $13.75 to $14.20 a share met expectations of $14.11.
"Following the end of the conference call, we emerged confident in the company's enviable strategic positioning, strong fundamentals and visibility -- all of which appear to be lost on the market, which prioritizes catalysts over consistency," Jim Cramer and Jack Mohr, co-portfolio managers of Action Alerts PLUS Charitable Trust Portfolio, wrote in a note. Action Alerts Plus holds Allergan.