Crude oil dropped 5.5 percent on Monday, pushing stocks sharply lower in Monday's trading session. Bobbi Rebell report.
Stocks sold off broadly on the first day of the first full trading week of the new year. U.S. crude fell below $50 a barrel, hitting a new 5-1/2 year low. The further drop in energy stocks like Chevron and Petrobras led the markets lower. But Allianz Global Investors U.S. investment strategist Kristina Hooper says don't buy the beaten down energy stocks just yet: (SOUNDBITE) KRISTINA HOOPER, U.S. INVESTMENT STRATEGIST, ALLIANZ GLOBAL INVESTORS (ENGLISH) SAYING: "I would sit on the sidelines with oil stocks right now. We just don't know the direction of oil prices. We think it could go lower before it starts moving up." Another victim of weakness in crude: Caterpillar. J.P. Morgan downgraded the construction equipment maker to underweight from neutral because of its exposure to oil and gas as well as the mining, construction and emerging markets. Skullcandy investors must like what they heard from Jefferies, which upgraded the headphones and earbuds maker to buy from hold. Jefferies sees stronger sales and earnings growth, citing Skullcandy's more dominant market position and controlled inventory. Shares of highflying antibiotic drug maker Cempra shot even higher after an oral version of its lead drug, solithromycin, met its main goal in a late-stage trial. Automakers reported strong December sales in the U.S. But investors punished stocks of Ford and Fiat Chrysler because they fell shy of expectations. GM's 19 percent sales gain beat estimates, but even those shares got sold off. In Europe, that drop in crude, coupled with concern that Greece could leave the euro, drove stocks to their biggest one-day drop in 3 years.