Wall Street slid on Monday after Kuwait pulled out of a joint venture with Dow Chemical due to the deepening global recession, threatening Dow's planned takeover of Rohm & Haas. Rising energy shares tempered losses after oil prices rose 6 percent following Israeli air strikes in the Gaza Strip. The third day of fighting came as Israel prepared to launch a possible invasion. Dow Chemical shares (DOW.N) tumbled to their lowest level since 1991 after Kuwait decided to end the planned $17.4 billion joint venture, citing slumping petrochemical sales and the global financial crisis. The news raised concerns that Dow, the largest U.S. chemical company, would not be able to complete its deal to buy rival Rohm & Haas (ROH.N), which Dow had agreed to acquire for about $15.3 billion in July. Rohm & Haas shares fell as much as 25 percent. The declines were exacerbated by light volume, analysts said. Trading is expected to be light throughout the week, abbreviated by the New Year's holiday on Thursday. "What stocks are grappling with is discounting how long, how deep of a recession this is going to be and when the sun is going to go up again," said Kevin Kruszenski, head of listed trading at KeyBanc Capital Markets in Cleveland. "That clearly drove the decision," he added, of Kuwait's decision to cancel the Dow Chemicals deal. The Dow Jones industrial average .DJI slipped 31.62 points, or 0.37 percent, to 8,483.93. The Standard & Poor's 500 Index .SPX fell 3.38 points, or 0.39 percent, to 869.42. The Nasdaq Composite Index .IXIC dropped 19.92 points, or 1.30 percent, to 1,510.32. The Dow is down 3.9 percent month-to-date after a 5.3 percent fall in November and 36 percent for the year. The Nasdaq was dragged down by large-cap tech companies including BlackBerry maker Research In Motion (RIM.TO) (RIMM.O), which fell 5 percent to $38.81, and Cisco Systems (CSCO.O), down 1.6 percent to $16.01. Dow Chemicals and Rohm & Haas were among the largest percentage decliners on the New York Stock Exchange. Dow was down 19 percent to $15.32, while Rohm & Haas fell 16.1 percent to $53.34. The collapsed joint venture added to concerns about the chemicals industry, which has been struggling because of recessions in most developed countries and a sharp slowdown in emerging economies. Economic worries overshadowed gains in the energy sector as oil climbed on concerns that crude supplies could be disrupted by tensions between Israel and the Hamas-ruled Gaza Strip. Chevron (CVX.N) and Exxon Mobil (XOM.N) were among the best performers on the Dow, while the S&P 500 index .GSPE of energy stocks rose 1.9 percent. Chevron rose 1.7 percent to $71.55 and Exxon Mobil rose 1.1 percent to $78.02. Analysts, meanwhile, said the rise in energy prices did not bode well for struggling consumers.

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