Concerns over the economic impact of the massive earthquake and tsunami in Japan, the world's third-largest economy, led to a broad sell-off in the stock market on Monday.
Nine out of the 10 sectors that make up the Standard and Poor's 500 index lost ground. Utilities companies fell 1.4 percent, the most of any group, as explosions at Japanese nuclear reactors in the wake of the disaster dimmed prospects for the nuclear energy industry.
The S&P index, the basis for most U.S. mutual funds, fell 7.89 points, or 0.6 percent, to 1,296.39.
The Dow Jones industrial average lost 51.24, or 0.4 percent, to 11,993.16. The Nasdaq composite dipped 14.64, or 0.5 percent, to 2,700.97.
"Everything is linked now," said David Katz, senior portfolio strategist at Weiser Capital Management. "There is no such thing as a catastrophe happening in any major country and it not affecting the global economy."
Japan's central bank pumped a record $184 billion into money market accounts to encourage bank lending. Financial analysts said the move could put pressure on Japan to raise interest rates, particularly since the country is saddled with massive debt that, at 200 percent of gross domestic product, is the biggest among developed nations.
"The fiscal position is deteriorating in Japan," said Channing Smith, managing director of equity strategies at Capital Advisors Inc. "If we get higher interest rates, that is a major threat to ... the global recovery."
Japan's benchmark Nikkei 225 index fell 633.94 points, or 6.2 percent, to close at 9,620.49 _ its lowest level in four months. The decline wiped out this year's gains.
Shares of upscale retailers with large businesses in Japan also fell. Tiffany & Co. and Coach Inc. both dropped 5.3 percent. Caterpillar Inc. gained 2.1 percent on assumptions that it will benefit from the country's large-scale rebuilding efforts.
In the U.S., Warren Buffett's Berkshire Hathaway Inc. said it would purchase chemical company Lubrizol for $9 billion in cash. Berkshire will pay $135 per share, a 28 percent premium to Lubrizol's closing stock price Friday of $105.44. Berkshire's Class B shares fell 1.3 percent on the news, while Lubrizol rose 28 percent.
Cephalon Inc. closed down 1.6 percent after a federal court overturned two of the patents on its painkilling drug Fentora. That could allow competitors to start selling cheaper generic versions of the drug soon.
Bond prices rose, sending yields lower. The yield on the 10-year Treasury note fell to 3.36 percent from 3.41 percent late Friday. Oil prices added 3 cents to settle at $101.19 per barrel.
Two stocks fell for every one that rose on the New York Stock Exchange. Consolidated volume came to 4.1 billion shares.