Stocks close mixed as oil tanks almost 6%

The stock market closed mixed on Monday, a welcome respite from what has been the worst start to a year ever on Wall Street, though the plunge in oil continued and sent crude prices to levels last seen in 2003.

Stocks initially shrugged off more turbulence in the mainland China stock market overnight, where shares plunged 5.3% after last week's 10% drubbing on growth fears, and jumped at the open only to see the gains evaporate at midday and then recover again late in the session.

The Dow Jones industrial average gained 52 points, or 0.3%, to close at 16,340 after being up as much as 115 points and as low as 115 points. The broader Standard & Poor's 500 stock index was up 0.1% after the broad-based index briefly fell into correction territory. The Nasdaq composite index was down 0.1%.

In a sign of just how bad the start to 2016 has been, the small-company Russell 2000 index briefly was more than 20% from its June closing high, putting it into bear-market territory.

The energy sector took the hardest hit as oil prices tumbled further and briefly fell below $31 a  barrel. U.S. crude slid 5.7% to $31.29 a barrel and is at the lowest level since 2003.

Stealth bear market mauls Wall Street

The main problem haunting Wall Street and global markets is the specter of a slowing economy in China, the world's second-biggest economy which has been a major driver of global growth in recent years.

Investors are still hoping the U.S. stock market can eventually stabilize after a horrific start to the year last week, when the Dow tumbled 6.2%, the Standard & Poor's 500 fell 6% and the broad market, as measured by the Wilshire 5000 Total Market Index, suffered a paper loss of $1.5 trillion.

But Wall Street pros stress that a rapid rebound likely won't occur, even though a relief rally at some point could materialize due to the extreme oversold nature of the market.

Gas prices could drop toward $1 a gallon

Ari Wald, a technical analyst at Oppenheimer, who correctly called a correction in the first quarter of this year, says "caution remains warranted."

"The key message is more time is needed before the strength can be sustained," he told clients in a note ahead of today's opening bell.

Wall Street will also be watching the start of the fourth-quarter earnings reporting season, which unofficially kicks off after today's closing bell with a report from aluminum maker Alcoa.

Like the past two quarters, analysts are projecting negative growth for the quarter.

Shares in Europe were lower as the Stoxx Europe 600, a broad European stock gauge that tumbled 6.7% last week, was down 0.4%.