U.S. stocks closed down on Monday despite oil settling higher, as concerns about Greece continued to weigh.
"This is a day when we've concerned about global macro more than anything else," said Art Hogan, chief market strategist at Wunderlich Securities. "The market is under pressure for various reasons, none of them energy."
He cited continued uncertainty about Greece, the impact of a stronger dollar and concerns about West Coast port congestion as disturbing markets. President Barack Obama's announcement that he will ask Congress for new authority to use force against ISIS surprisingly did not to encourage markets, he said.
The Dow Jones Industrial Average fell more than 130 points in early afternoon trade before coming off lows to close just under a 100 points lower, with Wal-Mart leading decliners.
"Overall we followed Europe (which closed lower)," said Peter Boockvar, chief market analyst at The Lindsey Group. He also noted that oil came off highs around the same time as stocks declined.
Regressive analysis by Wunderlich Securities showed that since crude began its plunge last year, the S&P 500 has had a 0.70 correlation with crude, up from the low 0.03 correlation the two have had for the last 25 years.
The Dow Transports fell more than 1 percent, with the airlines among the greatest decliners.
In broader market news, Greece's new leftist Prime Minister Alexis Tsipras said on Sunday in his election pledge that he would end the country's "cruel" austerity program and ruled out an extension of international bailout. Starting Wednesday, Greek banks will not be able to use Greek government bonds as collateral in daily refinancing operations with the European Central Bank.
"The biggest story out there is the lack of any concrete work in Greek negotiations," Hogan said. It's "disappointing" for markets that "we're not moving forward in the Greek negotiation problem."
Shares on the Athens Stock Exchange tumbled about 5 percent on Monday.
"I think (Greece) is going to be an issue, causing volatility, not a huge selloff," said Randy Frederick, managing director of trading and derivatives at Charles Schwab.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, has come off the 20-level to more comfortable levels of 16-17, he said. The VIX held near 18 on Monday.
The Organization of the Petroleum Exporting Countries (OPEC) hiked its demand forecast for 2015, predicting that low prices would help boost demand later in the year. However, the organization still said in a report on Monday that oil demand growth was "yet to show any signs of accelerating."
Crude oil futures settled up $1.17, or 2.3 percent, at $52.86 a barrel on the New York Mercantile Exchange.
"If you stabilize oil prices at these levels it lessens fear of deflation. I think that's an underlying positive for the market," said Peter Cardillo, chief market economist at Rockwell Global Capital.