U.S. stocks slump as oil price slides

NEW YORK - U.S. stocks plunged Monday, led by declines in energy stocks as the price of oil plunged again. The euro sank to a nine-year low against the dollar as new doubts surfaced about Greece's future in the common currency bloc.

Late in the trading session the Dow Jones industrial average had sunk 338 points, or nearly 2 percent, to 17,579, the blue-chip index's biggest intra-day drop since October. The Standard & Poor's 500 index was down 40 points, or 2 percent, to 2,028. The Nasdaq composite dropped 84 points, or 1.8 percent, to 4,642.

Oil prices extended a slide that began in June last year. Benchmark U.S. crude was down $1.91 at $50.76 a barrel on the New York Mercantile Exchange. The contract dropped 58 cents to $52.69 on Friday. Oil is down from $107 a barrel in June as global demand slackened while supplies remained high.

Energy stocks led declines in the S&P 500, dropping 3.1 percent. Chevron fell $3.50, or 3 percent, to $109.16 and Exxon Mobil dropped $1.98, or 2.2 percent, to $90.82.

The euro was trading at $1.1918 after falling as low as $1.1862, its lowest since December 2005. The drop was triggered by reports that German Chancellor Angela Merkel no longer believes it would be too risky for the 19-member eurozone if Greece dropped out of the currency bloc. Upcoming elections in Greece could be won by the Syriza party, which wants to renegotiate the terms of the country's international bailout, threatening its place in the euro group.

The euro has also been under pressure from expectations that the European Central Bank will expand monetary stimulus as the region's economy struggles.

France's CAC 40 was down 2.7 percent and Germany's DAX was 2.4 percent lower. Britain's FTSE 100 shed 1.5 percent. Greece's ATHEX index plunged 5.6 percent.

"The situation with Europe and Greece is causing some caution," said Scott Wren, Senior Global Equity Strategist at the Wells Fargo Investment Institute. "My feeling is that the ECB has band-aided the debt issue and we are going to continue to revisit the issue."

The Standard & Poor's 500 index is down 1.2 percent for the year after ending 2014 close to record levels. Despite the sluggish start, Wren still thinks that U.S. stocks will return between 6 and 10 percent for the year.

In U.S. government bond trading, prices rose. The yield on the benchmark 10-year Treasury note, which falls when prices rise, dropped to 2.05 percent.