Falling oil prices pull stocks down again

NEW YORK - Another drop in the price of oil tugged the stock market lower on Monday, as Exxon Mobil (XOM), Chevron (CVX) and other oil companies sank. Crude's recent slump has forced investors to rethink forecasts for the quarterly earnings season that starts this week.

KEEPING SCORE: The Dow Jones industrial average fell 96 points, or 0.5 percent, to close at 17,641. The Standard & Poor's 500 index lost 17 points, or 0.8 percent, to end at 2,028, and the Nasdaq composite lost 39 points, or 0.8 percent, finishing at 4,665.

LOWERING THE BAR: "What's happening is that we're seeing the very low bar for fourth-quarter earnings raising anxiety," said Sam Stovall, U.S. equity strategist at S&P Capital IQ. "It's the continued decline in oil, but it's also that nearly half of the S&P 500's revenues come from overseas. Japan is in recession, and Europe is teetering on the edge of it."

OUCH: Tiffany (TIF) cut its outlook for annual profits early Monday and also posted weaker sales in the holiday season, partially the result of a stronger U.S. dollar pinching results. The jewelry retailer's stock fell $14.44, or 14 percent, to $89.01. The luxury retailer also unveiled its first-ever ad campaign that will feature same-sex marriage couples.

IT'S A DEAL: AmerisourceBergen (ABC) announced plans to buy MWI Veterinary Supply (MWIV) for roughly $2.5 billion, or $190 a share. The deal would give the prescription-drug distributer a foothold in the growing business of veterinary medicine. MWI's stock jumped $14.39, or 8 percent, to $190.05, while AmerisourceBergen sank $1.88, or 2 percent, to $91.15.

ABROAD: Major markets in Europe climbed higher. Germany's DAX gained 1.4 percent, while France's CAC-40 added 1.2 percent. Britain's FTSE 100 closed flat.

GOLDMAN'S CALL: In a wide-ranging note to clients assessing the recent plunge in oil markets, Goldman Sachs (GS) cut its price forecasts for the coming two years. It said the benchmark New York rate would average $50.40 a barrel this year, far below its previous forecast of $83.75. It also cut its Brent forecast to $70 a barrel from $90. U.S. benchmark oil fell $2.29, or 4.7 percent, to $46.07 a barrel in New York. Brent, the international standard, slid $2.68, or 5.3 percent, to $47.43 a barrel in London.

DOWN AGAIN: Oil prices extended their slide, with U.S. crude losing $2.29 to settle at $46.07 a barrel. Brent lost $2.68 to $47.43. Both trade at their lowest levels since March of 2009. "I think we're going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low," said Craig Erlam, market analyst at Alpari.

ANALYST'S VIEW: "I think we're going to see plenty more volatility in the coming days as pressure mounts on oil producers to scale back production before prices get dangerously low," said Craig Erlam, market analyst at Alpari.

THIS WEEK: Monday also marked the unofficial start to the fourth-quarter earnings season as Alcoa (AA) turned in its latest quarterly results after the closing bell. The aluminum producer reported stronger earnings and revenue than Wall Street expected, pushing the stock up 20 cents, or 1 percent, to $16.38 in extended trading.

Others big names reporting this week include JPMorgan Chase (JPM), Goldman Sachs and Wells Fargo (WFC). Analysts expect big corporations to turn in modest results for the fourth-quarter, forecasting earnings growth of 4.6 percent, according to S&P Capital IQ. Overall sales are expected to be meager, rising 2.3 percent, largely the result of sliding revenue for oil companies.

GREECE AGAIN: Traders are also looking ahead to Greece's general election on Jan. 25. Though opinion polls show the Syriza party on course to win the election, few think it will be able to govern without the support of other parties. Diminishing fears of a Greek exit from the euro have helped take some pressure off the country's bond market.

ASIA'S DAY: In China, the Shanghai Composite Index lost 1.7 percent, and Hong Kong's Hang Seng added 0.5 percent. Seoul's Kospi shed 0.2 percent. Benchmarks in Sydney, Taiwan, Manila and Jakarta declined while Singapore and New Zealand rose. Tokyo was closed for a public holiday.

BONDS: U.S. government bond prices rose. The yield on the 10-year Treasury note dropped to 1.91 percent from 1.95 percent late Friday.

COMMODITIES: The price of gold gained $16.70 to settle at $1,232.80 an ounce, and silver rose 15 cents to $16.56 an ounce. Copper fell three cents to $2.73 an ounce.