Stocks Finish Lower, Despite Oil Plunge

Stocks finished lower Monday, as weakness in financials and energy stocks overpowered a sharp drop in oil price typical of what usually pushes the market higher.

The Dow made several brief ventures into positive territory during the day but couldn't hold there. The bluechip index finished less than 0.5 percent lower, while the S&P and the Nasdaq registered losses around 1 percent.

Energy stocks held Wall Street from the strong gains usually associated with a downturn in oil, exacerbated by broad losses across the commodities spectrum and a general weakness in financials, though the sector pared earlier losses.

U.S. light, sweet crude lost nearly $4 per barrel to near $121 as the dollar turned stronger and commodities tumbled across energy, grain and metals.

"Two weeks ago this market would have been up 150 points on that news," Art Cashin, director of floor operations at UBS, said of the oil move.

On the upside, consumer stocks showed some strength. Pfizer and Coca-Cola led gainers on the Dow, while ExxonMobil pointed the way for most leading energy producers on the way down.

The market earlier was shaken by inflationary pressures amplified by a series of economic data releases that showed continued higher costs in the marketplace and stagnant wages, even as factory production continued to grow.

Range Resources led the S&P losers as energy stocks were crushed by the downturn in oil.

Financials also pulled the market lower, with Wachovia and Freddie Mac sinking on continued fears over the health of the mortgage market. In tandem, home builders also slid lower as Oppenheimer analyst Meredith Whitney said on CNBCthat real estate prices would continue to move lower. Pulte Homes was the biggest loser on the S&P in the home builder sector.

"What happens with the bank stocks depends greatly on what happens with the housing market ... If housing prices keep going down, the banks are going to have lingering problems," Cashin said on CNBC.

Check out five stocks to watch, with the Wall Street Journal's John Hilsenrath, in video at left.

In earnings, Europe's biggest bank HSBC said its first-half profit fell 28 percent, in line with forecasts, as a $14 billion hit on bad debts on U.S. home loans and asset writedowns offset strong Asian growth.

HSBC said pretax profit in the six months was $10.2 billion, down from $14.2 billion a year before. The average forecast in a Reuters poll of seven analysts was $10.1 billion.

The inability of stocks to climb higher in the wake of oil's retreat amplified concerns that all is not well in the market and the economy.

"We've seen continued weakness in financial stocks and there are concerns still lurking there, especially after HSBC indicated they're facing continued issues," Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Ala., told Reuters. "And investors are trying to figure out whether the sudden dramatic decline in the price of crude oil is a sign we are entering into a global slowdown, which would further pressure the consumer."

Among the day's winners was Motorola , which continued to gain following last week's earnings report in which the mobile communications company posted a modest profit. The company announced it named Sanjay Jha, Qualcomm's chief operating officer and well respected industry name, to head its money-losing mobile devices unit and become co-chief executive with Greg Brown.

Humana also posted a solid gain on strong volume, as the health insurer said earnings were lower than a year ago but higher than analyst expectations, and the company raised its outlook.

Eastman Kodak also was among the S&P leadership even after a seemingly dismal earnings report, while Sears Holdings also led the index.