U.S. stocks slump with diving oil prices

U.S. stocks fell sharply on Monday with major stock indices going down more than 1.5 percent, as oil prices slid to new five-and-a-half-year lows on concerns about supply glut.

The Dow Jones Industrial Average slipped 331.34 points, or 1.86 percent, to 17,501.65. The S&P 500 lost 37.62 points, or 1.83 percent, to 2,020.58. The Nasdaq Composite Index shed 74.24 points, or 1.57 percent, to 4,652.57.

U.S. crude for February delivery fell below $50 a barrel for the first time since April 2009 in the session, while Brent crude for February also dipped to the lowest price in more than five and a half years.

At the close, Light, sweet crude for February delivery lost 2. 65 U.S. dollars to settle at 50.04 dollars a barrel on the New York Mercantile Exchange, while Brent crude for February delivery dropped 3.31 dollars to close at 53.11 dollars a barrel

Dragged by plunging oil prices, energy sector, the biggest laggard among the S&P 500's ten sectors, tumbled nearly 4 percent, with shares of energy giants Chevron Corporation and Exxon Mobil Corporation decreasing 4 percent and 2.74 percent, respectively.

Moreover, European shares posted a broad-based sell-off Monday as investors meditated on Greece's political uncertainty and falling oil prices.

"I think the renewed nervousness over Greece and over Europe is really the driving force of the weaker market, the possibility of Greece's exit from the euro zone weighed on investor sentiment," said Kenneth Polcari, director of the NYSE floor division at O' Neil Securities in New York.

"In the short term, U.S. stock market is going to be volatile, because this month has so much on the calendar." added Kenneth Polcari.

However, Chinese stocks painted a merrier picture after the New Year holiday, with the benchmark Shanghai Composite Index jumping 3.58 percent on Monday, the first trading day of 2015, and extending its 53-percent strong rally in 2014.

A string of major U.S. auto makers posted their December sales results in U.S. markets on Monday.

General Motors dealers in the United States delivered 274,483 vehicles last month for the company's best December sales in seven years, the company said Monday.

Ford Motor Company said it posted the best U.S. December sales results since 2005, with 220,671 vehicles sold.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, rose 11.97 percent to end at 19.92 Monday.

In other markets, the U.S. dollar climbed against most major currencies on Monday and increased against the euro to the highest level in almost nine years amid market concern that Greece may leave the euro zone after the election scheduled later this month.

In late New York trading, the euro moved down to 1.1939 dollars from 1.2006 dollars in the previous session, while the greenback bought 119.52 Japanese yen, lower than 120.34 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Monday as U.S. equities fell, driving a return to gold as a safe haven.

The most active gold contract for February delivery added 17.8 dollars, or 1.50 percent, to settle at 1,204 dollars per ounce.