NEW YORK -- U.S. stocks declined on Monday, with the Standard & Poor's 500 Index posting its worst month in more than three years, as investors expressed concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve as soon as September.
The S&P 500 lost 0.8 percent to 1,972.15 at 4 p.m. in New York, capping its biggest monthly slide since May 2012. The gauge in earlier trading fell as much as 1.2 percent before nearly erasing the retreat. The Dow Jones Industrial Average sank 0.7 percent to complete its worst monthly drop since May 2010.
"There's so much emotion right now, and in this environment you can come in any morning and have something out of Europe or Asia crossing us and that's what causes us to move," said Steve Bombardiere, an equity trader at Conifer Securities in New York. "There were a lot of people who wanted to buy a correction, but after last week they paused and are thinking about how long it is going to last."
Equities trimmed their losses in the late morning after energy shares in the benchmark index reversed a 2.5 percent selloff to rally as much as 1.4 percent. The move followed a jump in oil prices after a government report reduced its crude production estimates and OPEC said it's ready to talk to other global producers to achieve "fair prices." Stocks have been whipsawed by gains
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and losses since last week as markets remain subject to sudden shifts in investor sentiment.
The S&P 500 ended down 6.3 percent this month as China's currency devaluation earlier this month spurred concern over global growth, erasing more than $5.3 trillion in equity market values worldwide. The benchmark's 0.9 percent gain last week masked a volatile period in which the S&P 500 plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.
More than $2 trillion of share value was erased from U.S. markets between the end of July and the lowest levels of last week, a sum equal to roughly two years of S&P 500 earnings, data compiled by Bloomberg show.
While August ranks in the middle among months based on share performance, it has produced some of the worst returns of the year since 2009. During the week ended Aug. 12, 2011, the S&P 500 alternated between gains and losses of at least 4 percent for four days, something never seen in 88 years of data compiled by Bloomberg. In 2013, the S&P 500 fell 3.1 percent in August, one of only two months of negative returns in a year when the index surged 30 percent.
Despite this month's equities rout, remarks by Federal Reserve Vice Chairman Stanley Fischer suggested the central bank hasn't ruled out raising interest rates when the Federal Open Market Committee gathers on Sept. 16-17. Bets on a September liftoff climbed after Fischer said there is "good reason" to believe inflation will accelerate. Traders are now pricing in a 40 percent chance the central bank will act in September, up from a one-in-four chance last Wednesday.
The Fed has said it will be appropriate to raise rates when it has seen some further improvement in the labor market and is "reasonably confident" inflation will move back to its 2 percent target over the medium term.