Wall Street’s best August in nearly a decade came to a disappointing end on Monday as plunging Chinese stocks and tumbling oil prices sent the Dow to a rare two-day losing streak.

Today's Markets

The Dow Jones Industrial Average fell 47.92 points, or 0.50%, to 9496.28, the Standard & Poor's 500 lost 8.31 points, or 0.81%, to 1020.62 and the Nasdaq Composite dropped 19.71 points, or 0.97%, to 2009.06. The consumer-friendly FOX 50 sank 4.98 points, or 0.66%, to 746.85.

Much like Friday's slide, the markets were stuck in reverse throughout Monday's session despite several positive developments: a better-than-expected regional manufacturing report and three M&A deals, including Walt Disney’s (DIS) $4 billion buyout of Marvel Entertainment (MVL).

“I think people are very cautious towards the market here on seasonal factors and disbelief that profit growth and the economy can continue” to improve, said Nick Kalivas, director of financial research at MF Global. 

Aluminum maker Alcoa (AA) and Caterpillar (CAT) were the biggest percentage losers on the Dow, slumping 3% a piece. Defensive stocks like Merck (MRK) and Procter & Gamble (PG) posted modest gains. 

Led by a 2% slide in the energy sector, Monday's slide erased all of last week's tiny gains and pushed the Dow to its first two-day losing streak since mid-August. 

Even still, the benchmark index climbed more than 3% this month, its best August since 2000 and fifth up month in the last six. And the Dow battled back in the day's final minutes, erasing half of an early triple-digit selloff. 

The question now is whether or not this two-day slide is the start of a “healthy” pullback that even some bulls have been calling for, a one-time blip or a larger selloff like the one in China.

“I personally think it’s going to continue for a while,” NYSE trader Ben Willis of VDM Institutional Brokerage told FOX Business, adding that he sees the S&P testing the 1000 level.  “That’s not really a bearish a call. I think it’s very healthy for a bull market to be able to have pullbacks where you can regroup before you march forward.”

Monday’s selling began overseas as China’s Shanghai Composite plunged 6.7% overnight -- its worst day since June 2008 -- to a three-month low. The index, which had led the world higher earlier this year, has plummeted 21% this month, its steepest monthly tumble in 15 years. 

At the same time, crude oil plummeted through the $70-a-barrel threshold, dragging down energy stocks like Hess (HES) and Marathon Oil (MRO). Suffering its worst selloff in more than two weeks, crude fell $2.78 a barrel, or 3.82%, to settle at $69.96 -- the lowest level since Aug. 18. 

Copper prices slid 4% -- their steepest slide since June 22 -- putting pressure on metals and mining stocks like Newmont Mining (NEM) and Freeport-McMoRan (FCX).

Kalivas said he was surprised that the Disney transaction failed to "excite" the markets at all. Disney agreed to pay $4 billion for Marvel in a cash-and-stock deal that values the comic book company at $50 a share, a 29% premium to its closing price Friday.

The markets similarly failed to respond positively to the Chicago Fed’s Purchasing Manager’s index, which rose to 50 in August from 43.4 the month before, marking the first month without contraction since September 2008. 

“Perhaps what the market is going to need going forward is something a little more substantial -- a little more of a trend and a pattern and not just a couple of numbers here and there,” NYSE trader Ted Weisberg of Seaport Securities told FOX Business.

Corporate Movers

Baker Hughes (BHI) agreed to purchase fellow oilfield-services company BJ Services (BJS) for $5.5 billion in cash and stock. The offer represents a 16% premium to the closing price of BJ Services on Friday.

Huntsman (HUN) unveiled a $415 million deal to buy some of bankrupt rival Tronox’s assets. The two chemicals makers entered into a “stalking horse” agreement, which sets a floor for the bidding in a bankruptcy auction but could be topped.

American International Group (AIG) plunged 10% after Barron’s said the bailed-out insurer’s shares look overpriced after soaring 50% last week. At the same time, Barron’s said AIG has negative tangible common shareholder equity but that it’s hard to assess the complex company with few analysts covering it. 

Delcath (DCTH) soared 16% to 52-week highs after doxorubicin, the medical device maker’s cancer treatment, received orphan status from U.S. regulators. The FDA status allows for up to seven years of marketing exclusivity.

Morgan Stanley (MS) was reportedly downgraded to “neutral” by Bank of America-Merrill Lynch. The analysts cited concerns about the competitive pay environment and said Morgan’s shares are “no longer deeply undervalues,” Dow Jones Newswires reported. BofA-Merrill also lowered its third-quarter and 2009 earnings estimates on Morgan.

Duke Energy (DUK) announced plans to build its ninth U.S. wind farm in Wyoming, a project that will be powered by at least 66 turbines from General Electric (GE).

Global Markets

European markets tumbled 1% as Germany's DAX fell 0.96% to 5464.61 and France's CAC 40 slid 1.07% to 3653.54

In the wake of China's selloff, Japan's Nikkei 225 tumbled 0.40% overnight to 10492.53 and Hong Kong's Hang Seng lost 1.86% to 19742.19.