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Stock dropped Monday, as crude traded at record highs. The Dow Jones Industrial Average dropped 108.28 points (-0.77%), Standard & Poor's 500 index traded 13.09 points lower (-0.84%), and the Nasdaq decreased 25.63 points (-0.91%). Volume on the NYSE was higher than usual at 1.29 billion shares, and decliners trounced advancers by a ratio of about 8:3.

Crude ended up $2.11 to $85.80/barrel, and traded above $86 for the first time ever. Recently, there have been oil supply concerns because of rising tensions between Kurdish militants in northern Iraq and Turkey. With crude prices surging, investors were comfortable supporting companies in the energy sector, but companies whose costs are heavily depended on fuel like transportations and airlines fell. Another sign of uncertainty in the market came from gold, which hit a 28-year high today as the dollar continued to drop. The US 10-year Treasury was up 3/32 in price, pushing yields down to 4.67%.

The only economic data released Monday was the Empire State Manufacturing Index, which increased to 28.8. The number was well above forecasts of 13.1, but really did not have a huge impact on the markets. Citigroup (-3.6%) released earnings Monday morning, and could be partially blamed for the market's weakness. Though its earnings did beat forecasts provided by the company a couple weeks ago, profits dropped still 57% from last year (full story), and in all, it was even admitted by CEO Chuck Prince that the quarter was disappointing. Citigroup also was part of a group of banks, which included JP Morgan and Bank of America, who pooled money to create an enormous fund to provide liquidity in the commercial paper market.

Energies (+1.1%) was easily the lead sector, while financials (-1.8%) experienced the most weakness. Tektronix (+33.6%) agreed to be purchased by Danaher (-1.6%) for $2.8 billion (full story). Eaton (-4.1%) announced a 4% increase in earnings, but guided lower in its outlook (full story). Mattel (-1.0%) failed to match analysts' estimates and announced a drop in profits (full story). Genentech(+0.32%), which announced right after the close, beat estimates by a penny, but was trading slightly down in after hours at last check.

Among the economic news expected on Tuesday is the Bank of Canada Interest Rate Announcement (9:00 AM) and Industrial Production (9:15 AM). Watch out for major earnings news from Intel, IBM, Johnson & Johnson, and Yahoo.

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Source: Monday Wrap - Dow -0.77%, S&P -0.84%, NQ -0.91%