Stock market today: Dow drops 305 points as US stocks stumble into the new year

• US stocks fell Monday, with the Dow down as much as 500 points and the Nasdaq 100 off nearly 5% from its peak.
• Rising interest rates over the past month have weighed on stock prices.
• Boeing stock dropped as much as 6% after a plane crash in South Korea over the weekend.

US stocks declined on Monday as the tech sector's sell-off accelerated into year-end.

The Dow Jones Industrial Average recovered some of the morning's losses, down about 300 points around midday after falling by more than 500 points shortly after the opening bell. The S&P 500 and the Nasdaq Composite also erased some earlier losses.

The Nasdaq 100 has extended its mid-December decline to nearly 5% amid a rise in bond yields, while the S&P 500 has dropped by about 3% over the same time period.

Yields edged lower on Monday, with the 10-year Treasury yield down six basis points to 4.559%. However, the yield is up sharply since earlier in the month when it was hovering around 4.1%.

According to Fairlead Strategies founder Katie Stockton, the recent weakness in the stock market has flashed a technical "sell" signal.

"The SPX posted a modest gain during the shortened week, but out intermediate-term indicators logged 'sell signals nonetheless, including the weekly stochastic and MACD," Stockton said, referring to two momentum-based technical indicators.

Stockton said the sell signals increase the probability of a stock market correction in January.

A slide in Boeing shares weighed on the Dow on Monday, with the stock down as much as 6% after a Boeing 737-800 plane crashed in South Korea on Sunday, killing 179 people onboard.

For economic data this week, investors will watch the release of the S&P Case-Shiller home price index on Tuesday morning, followed by initial jobless claims on Thursday and ISM manufacturing data on Friday.

It's a shortened holiday trading week, with the stock and bond markets closed on Wednesday for New Year's Day.

Here's where US indexes stood at 12:35 p.m. on Monday:

• S&P 500: 5,929.75, down 0.69%
• Dow Jones Industrial Average: 42,677.55, down 0.73% (-314 points)
• Nasdaq composite: 19,570.66, down 0.75%

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In commodities, bonds, and crypto:

• West Texas Intermediate crude oil jumped 0.95% to $71.27 a barrel. Brent crude, the international benchmark, was higher by 0.66% to $74.28 a barrel.
• Gold was lower by 0.20% to $2,626.60 an ounce.
• The 10-year Treasury yield dropped six basis points to 4.559%.
• Bitcoin declined 0.81% to $92,810.