The Dow Jones Industrial Average's road to 20,000 had another detour on Monday as a selloff in crude oil dragged on the energy sector and soured sentiment.
The Dow slid 0.37% to 19,888 on Monday, though remained one rally away from clinching its next milestone. The S&P 500 was down 0.35%.
The Nasdaq was the only index in the green on Monday, rising 0.19% and reaching another record close of 5,531. Deals-related rallies in health care helped to boost the index.
Merrimack Pharmaceuticals (MACK) was 1.9% higher after drugmaker Ipsen agreed to buy some of its assets, including its drug for pancreatic cancer, in a deal worth more than $1 billion. Merrimack also said it would eliminate about 80% of its staff as it refocuses its pipeline.
Ariad Pharmaceuticals (ARIA) surged 72% after Takeda Pharmaceutical agreed to acquire the drugmaker in a deal worth $5.2 billion. Takeda offered to purchase Ariad for $24 a share, valuing the drugmaker at a premium of 75% compared to its closing price on Friday of $13.74. The all-cash deal is expected to close by the end of February.
Other drugmakers including Gilead Sciences (GILD - Get Report) , Celgene (CELG - Get Report) , Amgen (AMGN - Get Report) and Novartis (NVS - Get Report) moved higher. The Health Care SPDR ETF (XLV - Get Report) rose 0.42%.
Dow 20,000 came agonizingly close on Friday, but building momentum flagged in the final moments to fall short of the milestone. The Dow came within a point of the level in the afternoon session before backing off, just as it has for weeks. The S&P 500 and Nasdaq each closed at fresh records on Friday.
Crude oil prices fell below $53 a barrel on Monday, continuing to trade off of data late Friday that showed rising U.S. production. A weekly reading on U.S. activity showed the number of U.S. oil rigs climb for the 10th consecutive week in a row.
Commodities trading has been erratic in the past week as investors weigh U.S. production against an agreement among major oil-producing nations designed to rebalance markets. A production cut agreement among Organization of Petroleum Exporting Countries and other non-OPEC producers took effect at the beginning of the year.
"With the market having already attracted a large volume of buying in anticipation of a rebalance market and months of price gains on the announcement of talks, the progress of talks, and the announcements of the production cut agreements, the market runs the risk of a "sell the news" reaction even if compliance is relatively good," said Tim Evans, energy futures specialist at Citi, in a note.
West Texas Intermediate crude closed 3.8% lower at $51.96 a barrel on Monday, its lowest level since mid-December.
The energy sector was the worst performer on Monday. Major oilers including Exxon Mobil (XOM - Get Report) , Chevron (CVX - Get Report) , Halliburton (HAL - Get Report) and Marathon Petroleum (MPC - Get Report) slid, while the Energy Select Sector SPDR ETF (XLE - Get Report) fell 1.4%.
Wall Street was also adopting a wait-and-see approach ahead of fourth-quarter earnings later this week. The big banks, as usual, will be among the first to report earnings. Bank of America (BAC - Get Report) , JPMorgan (JPM - Get Report) and Wells Fargo (WFC - Get Report) will report on Friday.
Average earnings for the S&P 500 in the fourth quarter are expected to increase 4.4% from the same period a year earlier. Earnings growth would mark the second straight quarter of gains after the third quarter broke an earnings recession that lasted for four consecutive quarters. Earnings grew 4% in the third quarter of 2016.
The U.S. economy warrants "somewhat more regular" interest rate hikes, Boston Federal Reserve President Eric Rosengren said on Monday. In a speech in Hartford, Conn., Rosengren said the "economic circumstances have evolved and now imply the need for a different stance of monetary policy." Rosengren is a voting member of the Federal Open Market Committee this year.
Atlanta Fed President Dennis Lockhart brought a more dovish take on Monday afternoon, arguing that the U.S. economy isn't likely to breach higher than 2% growth. In a speech in Atlanta, Lockhart said the U.S. economy would likely reach 2% next year but no higher. "It's less certain that the economy is positioned for a breakout to markedly higher growth on a sustained basis," Lockhart said.
Pet health care company VCA (WOOF) agreed to be acquired by Mars Inc. on Monday in a deal worth $9.1 billion. Snacks and petcare company Mars agreed to purchase VCA for $93 a share, a roughly 31% premium to its close on Friday. The deal is slated to close in the third quarter of this year. VCA shares jumped 28%.
Alibaba (BABA - Get Report) shares moved almost 1% higher after its CEO Jack Ma met with President-elect Donald Trump at Trump Tower. Trump and Ma characterized the meeting as successful and said the focus was on jobs and small business.
Fiat Chrysler (FCAU - Get Report) added 1.4% after outlining plans to invest $1 billion in plants in Michigan and Ohio, adding 2,000 new jobs to the U.S. The move comes after President-elect Trump took aim at a number of automakers via Twitter in which he criticized any plans to ship jobs out of the U.S. and threatened to impose border taxes.
Urban Outfitters (URBN - Get Report) fell 1.9% after reporting same-store sales over the critical holiday shopping season. Total same-store sales climbed 1.5%, which was less than expected. Same-store sales at its Urban Outfitters stores increased 3.6%, while Anthropologie sales declined 1%.