NEW YORK (AP) — U.S. stocks wobbled and finished mostly lower Monday as the price of oil continued to nosedive thanks to the strong dollar. Energy companies took the biggest losses as U.S. crude hovered around $40 a barrel, its lowest price in almost four months, and materials companies also traded lower.
Every oil, gas and pipeline company on the Standard & Poor's 500 finished lower as a slump in the price of oil and other fuels extended into a third week. The losses for energy and mining, chemical and building companies canceled out gains for technology and health care companies. A survey showed U.S. manufacturing continued to grow in July, but did so at a slower pace than the month before. That, too, is linked to strength in the dollar.
"Manufacturing and oil have moved in lockstep for the better part of five years," said Steve Chiavarone, associated portfolio manager for Federated Investors.
The Dow Jones industrial average fell 27.73 points, or 0.2 percent, to 18,404.51. The S&P 500 lost 2.76 points, or 0.1 percent, to 2,170.84. The Nasdaq composite gained 22.06 points, or 0.4 percent, to 5,184.20. The Nasdaq rose last week while the other major indexes fell. The Dow and S&P 500 set all-time highs recently and the Nasdaq is within 1 percent of the record it set in July 2015.
A survey by the Institute for Supply Management said U.S. factories expanded for the fifth month in a row, although its survey reading was lower in July than it was in June and factory employment decreased. A survey of manufacturing in Europe showed a similar result, and two surveys showed manufacturing activity in China was relatively weak in July.
The dollar has been gaining strength in over the last few years, and while it appeared to level off recently, it appears to be picking up again because investors are realizing the Federal Reserve may raise interest rates later this year. Chiavarone said that's starting to hurt oil prices and slow down U.S. manufacturing. When the dollar gets stronger, oil falls because it's priced in dollars.
Benchmark U.S. crude lost $1.54, or 3.7 percent, to $40.06 a barrel in New York, while Brent crude, which is used to price international oils, gave up $1.39, or 3.2 percent, to $42.14 a barrel in London. The price of oil has fallen 13 percent in a little more than two weeks and during the day it traded below $40 a barrel for the first time since April 8. Exxon Mobil fell $3.09, or 3.5 percent, to $86.85, its biggest loss since January. Chevron shed $3.37, or 3.3 percent, to $99.11.
Ionis Pharmaceuticals rose after it said a drug designed to treat spinal muscular atrophy in infants worked in a late-stage clinical study. It also said drugmaker Biogen exercised an option to develop the drug globally and will pay Ionis $75 million. Biogen plans to start seeking marketing approval for the drug, nusinersen, in the next few months. Ionis surged $8.82, or 30.2 percent, to $38.01 and Biogen gained $11.90, or 4.1 percent, to $301.83, more than any other S&P 500 stock.
Those moves helped pull health care stocks higher. Technology and consumer stocks also gained ground, and the S&P 500 consumer company and tech indexes reached annual highs. Netflix rose $3.12, or 3.4 percent, to $94.37 and Apple added $1.84, or 1.8 percent, to $106.05.
The dollar edged up to 102.35 yen from 102.03 yen. The euro fell to $1.1169 from $1.1179.
Bond prices fell and the yield on the 10-year U.S. Treasury note rose to 1.52 percent from 1.45 percent, reversing a slide in bond yields on Friday. That's also a sign more investors are expecting higher interest rates.
Tesla agreed to buy SolarCity for $2.6 billion in stock. More than a month ago it offered to buy the company for about $2.5 billion, and investors had hoped for a bigger offer. SolarCity has 45 days to seek better offers. Tesla CEO Elon Musk owns more than 20 percent of both companies, and SolarCity is run by his cousin Lyndon Rive. The deal won't go through unless it's approved by a majority of shareholders other than Musk.
SolarCity also cut its guidance Monday. Its stock fell $1.98, or 7.4 percent, to $24.72 and Tesla Motors lost $4.78, or 2 percent, to $230.01.
Caesars Entertainment said it agreed to sell its social and mobile games business to a Chinese consortium for $4.4 billion. Its stock advanced 46 cents, or 6.7 percent, to $7.36.
Verizon Communications agreed to buy Fleetmatics Group for $2.4 billion, or $60 per share. Fleetmatics makes software that cable companies, energy companies and others use to manage vehicle fleets. Its stock jumped $16.63, or 38.7 percent, to $59.59 and Verizon fell 91 cents, or 1.6 percent, to $54.50.
Britain's FTSE 100 fell 0.5 percent while the CAC-40 in France gave up 0.7 percent. Germany's DAX fell 0.1 percent. Japan's Nikkei 225 stock index gained 0.4 percent and Hong Kong's Hang Seng index added 1.1 percent. South Korea's Kospi gained 0.7 percent.
In other energy trading, wholesale gasoline fell 2 cents to $1.30 a gallon. Heating oil shed 5 cents, or 3.8 percent, to $1.28 a gallon. Natural gas gave up 11 cents, or 3.7 percent, to $2.77 per 1,000 cubic feet.
In metals trading, the price of gold rose $2.10 to $1,359.60 an ounce and silver gained 15 cents to $20.50 an ounce. Copper fell 2 cents to $2.20 a pound.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP . His work can be found at http://bigstory.ap.org/journalist/marley-jay