Stocks pulled slightly lower on Monday as a selloff in health care squared off against a rally in energy.
The S&P 500 was down 0.2%, the Dow Jones Industrial Average fell 0.2%, and the Nasdaq slid 0.27%.
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, was up 2.6% to $42.89 a barrel on Monday.
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."
Walmart (WMT - Get Report) confirmed a deal to buy online retailer Jet.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 losses after flights began to resume operating as normal after a system-wide computer glitch left thousands of passengers stranded. The glitch affected flights at airports as wide-ranging as Los Angeles, Tokyo and London.
Sotheby's (BID) was on watch after exceeding analysts' estimates in its recent quarter. The auction house earned an adjusted $1.51 a share in its second quarter on revenue of $298.7 million. Analysts anticipated earnings of $1.04 a share on revenue of $282 million.
Tyson Foods (TSN - Get Report) was lower despite a better-than-expected quarter and increased outlook. The owner of Sara Lee earned an adjusted $1.21 a share, above estimates of $1.06. The company also upped its full-year guidance to $4.40 to $4.50 a share, up from previous guidance of $4.20 to $4.30.
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.
JPMorgan Chase (JPM - Get Report) was downgraded to neutral from buy with a $65 price target, Citi said Monday. Analysts said the move was a valuation call as forward consensus estimates appear too high.
21st Century Fox (FOXA) was downgraded to equal weight from overweight at Barclays. The firm removed the stock from its top picks list, citing a lack of near-term catalysts.