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US stocks drop as oil resumes downward slide

New York - US stocks fell on Monday, with petroleum-linked shares especially weak, as oil prices resumed their downward slide.

The Dow Jones Industrial Average fell 208.29 points (1.29%) to 15 885.22.

The broad-based S&P 500 dropped 29.82 (1.56%) to 1 877.08, while the tech-rich Nasdaq Composite Index shed 72.69 (1.58%) to 4 518.49.

Sinking oil prices have been an albatross on US stocks for much of the year, with crude supplies mounting even as the global economy slows.

On Monday, oil prices broke a two-day streak of gains on more worries about the slowdown in Chinese demand and reports that Saudi Arabia plans to push forward with energy development work without cutting back production.

"You continue to not see any stabilization in oil prices," said Art Hogan, chief market strategist at Wunderlich Securities. Oil is "the transmission vehicle of bad news."

Dow members ExxonMobil and Chevron lost 3.4% and 3.2%. Others even more hard-hit included oil services company Weatherford International, which plunged 11.5%, and midsized producer EOG, which fell 6.8%.

Large bank shares dropped. Bank of America shed 4.4%, and Citigroup and Dow member Goldman Sachs both lost 3.7%.

Dow member Caterpillar, which provides industrial equipment to the oil and mining sectors, fell 5.0% as Goldman Sachs downgraded the stock.

Twitter dropped 4.6% as it confirmed that four top executives were leaving the company.

Analysts said the move suggests a turnaround under chief executive Jack Dorsey will likely take longer than expected. The shakeup is "likely not positive," said a note from investment bank Jefferies.

Dow member McDonald's rose 0.7% as it reported a 9.9% jump in fourth-quarter net income to $1.2bn in part due to the launch of an all-day breakfast menu in the United States.

Tyco International vaulted 11.6% after announcing it will merge with Johnson Controls in a deal that shifts Johnson's headquarters for tax purposes to Ireland. Johnson Controls fell 3.9%.

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