NEW YORK — Stocks fell Monday as higher oil prices weighed on the market.
The market has been shaken in recent weeks by the uprising in Libya and its effect on oil, which approached $107 a barrel Monday before settling at $105.44 in New York trading.
A sustained rise in the price of oil could hurt the economic recovery by raising manufacturing and transportation costs.
Stocks had started higher on news of two corporate deals. Hard-drive maker Western Digital jumped 16 percent after announcing plans to buy Hitachi Global Storage Technologies for $4.3 billion.
French fashion conglomerate LVMH Moet Hennessy Louis Vuitton says it will buy Italian jeweler Bulgari SpA for $6 billion.
Investors fear that oil prices could surge even higher if the unrest in the Middle East and North Africa spreads to major oil-producing countries such as Saudi Arabia.
“The market is going to have to sort out what’s fact and what’s rumor,” said Quincy Krosby, market strategist for Prudential Financial. “They are saying, ‘How high can the prices go, and, more importantly, for how long?’ “
The Dow Jones industrial average fell 79.85 points, or 0.7 percent, to close at 12,090.03. The Standard & Poor’s 500 fell 11.02 points, or 0.8 percent, to 1,310.13. The Nasdaq fell 39.04 points, or 1.4 percent, to 2,745.63. Each index has lost more than 1 percent so far this month.
Technology stocks led S&P declines, while utilities stocks clung to slim gains.
The technology sector was hurt not only by an analyst downgrade but also by concerns over the impact from rising energy prices.
“If you’re paying more for the transportation of your goods, you’re probably going to pay less for the technology that goes into moving your goods,” said John Canally, economist and investment strategist at LPL Financial.
Starbucks rose 1.4 percent after chief executive Howard Schultz told The Wall Street Journal the company is looking for companies to acquire.
McDonald’s rose 0.3 percent, the biggest gain among the 30 companies that make up the Dow average.
