U.S. stocks closed lower Monday as pressure from a decline in oil prices mostly offset gains in health care stocks. (Tweet This)
"I think the market largely came off because crude oil had a rough day again," said Jeremy Klein, chief market strategist at FBN Securities.
"I think when (oil) gets more volatile it becomes an issue," he said.
The major averages came off session lows in the close. Materials and industrials still ended nearly 1 percent lower to lead S&P 500 decliners. The Dow transports closed 0.9 percent lower after briefly falling more than 1 percent with JetBlue the greatest laggard.
U.S. crude oil futures settled near session lows at $35.70 a barrel, down $1.09 or 2.96 percent. Trade was choppy, with WTI earlier spiking above $37.
"As long as oil can hang above the $35 level, the market seems comfortable with oil above $35," said Peter Coleman, head trader at Convergex. He noted 2,075 as a resistance level for the S&P 500.
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Health care closed up 1 percent and telecommunications rose nearly 0.7 percent as the only two S&P 500 advancers.
The iShares Nasdaq Biotechnology ETF (IBB) posted a three-day win streak with gains of 0.9 percent. However, the ETF ended well off session highs as it earlier rose more than 2 percent to levels not seen since Jan. 28. Year-to-date, IBB is still 20 percent lower.
Edwards Lifesciences surged 16.86 percent to close at a record after earlier hitting a new all-time high. Several brokerages raised their ratings on the stock after a study showed a less-invasive heart valve implant was superior to open surgery, Reuters said.
Apple closed up 0.99 percent. The stock failed to close above its 200-day moving average after topping it in intraday trade for the first time since Nov. 5.
The Nasdaq composite still underperformed the S&P and Dow as Facebook fell 3 percent to $112.55 a share. Deutsche Bank said Monday it thinks Facebook's first-quarter results may come in light but maintained a positive long-term view with a "buy" rating and $145 price target, according to StreetAccount.
Other major tech names such as Amazon.com, Intel and Alphabet also declined to weigh on the Nasdaq.
"It's almost like a small area of the market is what's keeping us up," said JJ Kinahan, chief strategist at TD Ameritrade.
He attributed much of the decline in stocks to "profit-taking after a big week" and "maybe a bit of juggling. What sectors do we want to be in, what sectors do we want to be out of, come earnings?"
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"Now we're in a little bit of a lull until earnings season gets going," said James Meyer, chief investment officer at Tower Bridge Advisors.
Treasury yields held mixed, with the 2-year yield higher near 0.74 percent and the 10-year yield little changed around 1.77 percent.
The U.S. dollar index held mildly lower, with the euro at $1.14 and the yen at 111.3 yen against the greenback.
Gold futures for June delivery settled down $4.20 at $1,219.30 an ounce. The Market Vectors Gold Miners ETF (GDX) closed down 2.9 percent.
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Federal Open Market Committee voting member Boston Fed President Eric Rosengren said he believed it will likely be appropriate to resume the path of gradual tightening sooner than is implied by financial market futures. He added the "U.S. has weathered foreign shocks quite well" and that risks from abroad are easing.
"It doesn't matter what he's saying because it only matters what (Fed Chair) Janet Yellen is saying and she told us what she's thinking last week," Klein said.
Alternate members Minneapolis Fed President Neel Kashkari and Dallas Fed President Rob Kaplan are due to give remarks in the evening. Fed Chair Janet Yellen is due to speak on Thursday.
In economic news, factory orders declined 1.7 percent in February. One of the major reports due this week is the Fed meeting minutes on Wednesday.
U.S. stocks shook off declines in oil prices to close higher Friday after an encouraging jobs report and ISM manufacturing data. The major averages posted their sixth positive week in the last seven.
"I think we're in a fairly stable place in the U.S. as long as we don't see huge corrections one way or another in oil or the dollar," Todd Hedtke, senior vice president and chief investment officer for Allianz Investment Management (AIM) U.S., said on Friday.
European stocks closed higher but off session highs.
In Asia, the Nikkei 225 closed 0.25 percent lower. Markets in mainland China and Hong Kong were closed for a holiday.
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The Dow Jones industrial average closed down 55.75 points, or 0.31 percent, at 17,737.00, with Nike leading decliners and Pfizer the top advancer.
The S&P 500 closed down 6.65 points, or 0.32 percent, at 2,066.13, with materials leading eight sectors lower and health care and telecommunications the only advancers.
The Nasdaq composite closed down 22.75 points, or 0.46 percent, at 4,891.80.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, rose nearly 7.8 percent to just above 14.
About 11 stocks declined for every four advancers on the New York Stock Exchange, with an exchange volume of 806 million and a composite volume of about 3.4 billion in the close.
On tap this week:
Monday
7 p.m. Minneapolis Fed President Neel Kashkari
8 p.m. Dallas Fed President Rob Kaplan
Tuesday
Earnings: Walgreen Boots Alliance, Darden Restaurants, Pershing Square Holdings
1 a.m. Chicago Fed President Charles Evans in Hong Kong
8:30 a.m. Trade deficit
9:45 a.m. Markit Services PMI
10 a.m. ISM Services
10 a.m.: JOLTS
Wednesday
Earnings: Monsanto, Constellation Brands, RPM International, Apollo Education, Bed Bath & Beyond
10:30 a.m.: Oil inventories
12:20 p.m. Cleveland Fed President Loretta Mester
2 p.m. FOMC minutes from its March 15-16 meeting
6:30 p.m. St. Louis Fed President James Bullard
8 p.m. Dallas Fed President Rob Kaplan
Thursday
Earnings: CarMax, Rite Aid, Ruby Tuesday, Duluth, WD-40
8:30 a.m. Jobless claims
10:30 a.m.: Natural gas inventories
3 p.m. Consumer credit
5:30 p.m. Fed Chair Yellen with former chairmen Bernanke, Greenspan, Volcker on a panel hosted by International House
8:15 p.m. Kansas City Fed President Esther George
Friday
10 a.m. Wholesale trade
1 p.m.: Oil rig count
*Planner subject to change.
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