Energy stocks post worst 2-day performance in 2½ years
Chesapeake Energy was the biggest loser of the day, dropping 7.2 percent. It is down more than 20 percent over the last week since announcing it would lay off about 13 percent of its workforce .

Crude oil prices also fell as investors dumped risk assets, with international benchmark and U.S. West Texas Intermediate crude both losing about $2 a barrel, or roughly 3 percent, since the end of Thursday's session.

Over the two-day stock market sell-off , the sector dropped 8.3 percent. That is its worst two-day performance since Aug. 24, 2015, when energy stocks dropped 8.5 percent.

Energy stocks were the biggest decliners throughout much of a second day of selling on Wall Street on Monday, with the sector heading for its worst two-day performance in 2½ years.

Hess trailed just behind Chesapeake, dropping nearly 7 percent on the day, after reporting a bigger-than-expected quarterly loss. The company's guidance on 2018 production was about 9 percent below the Street's expectations, according to Capital One Securities.

"Want to get more positive on HES given world-class Guyana asset ..., but can't point to much that warrants upgrade from Underweight," Capital One analyst Phillips Johnston said in a research note on Monday.

The earnings report from Hess continued a string of weak earnings from U.S.-headquartered oil and gas companies.

Exxon, which on Friday badly missed expectations for profits due in part to weakness in its U.S. exploration and production segment, was the third-biggest laggard. Integrated oil peer Chevron also disappointed on earnings on Friday.

Shares of both companies were down more than 10 percent over the last two sessions.

"Earnings were significantly weaker than expected," said Rob Thummel, portfolio manager at Tortoise Capital Advisors, referring to Exxon and Chevron. "That's what's really driven the S&P energy stocks off more significantly."

Shares of energy stocks have lagged the rebound in crude oil futures since June. During that period, oil prices have risen nearly 50 percent, while the S&P energy sector has run up almost 9 percent.

While Thummel believes that's an opportunity, he says it's been disappointing for investors already exposed to energy stocks.

"I think it's just a clear indicator that people don't believe the oil price," said Thummel. "They think it's too high. They think it's coming down."

Oil prices have come under pressure from a rising U.S. dollar as the correlation between the greenback and crude futures reasserts itself. There are also fresh signs that U.S. output is offsetting OPEC's deal to limit production, with American supplies topping 10 million barrels a day in November for the first time since 1970.