US stocks started the second quarter down, pressured by disappointing manufacturing data, after the Dow industrials and S&P500 capped off the first quarter with records.
The Dow Jones Industrial Average declined 5.69 points, or less than 0.1 per cent, to 14572.85, with Hewlett-Packard and Intel leading the index lower.
The Standard & Poor's 500-stock index lost 7.02 points, or 0.4 per cent, to 1562.17, as industrial shares led eight out of 10 industry sectors lower. The benchmark index finished at a record Thursday, bringing first-quarter gains to 10 per cent. Markets were closed Friday for Good Friday. The tech-heavy Nasdaq Composite on Monday gave up 28.35 points, or 0.9 per cent, to 3239.17.
"We just finished a strong quarter, and there are a couple weeks before earnings reports really start up," said John Carey, executive vice president and money manager with Pioneer Investments in Boston, which manages about $US200 billion ($192bn) in assets. Mr. Carey said he isn't currently shifting his asset allocations. "Unless we see some real surprises out of the central banks, I think the focus will really be on business fundamentals."
The Institute for Supply Management's manufacturing purchasing managers index fell to 51.3 in March from February's 54.2. That reading was below expectations of 54. At the same time, February construction spending rose 1.2 per cent on the month, slightly above forecasts for a 1 per cent rise.
"The market has been up, up and away, so it wouldn't surprise me to see a bit of a pullback as people take profits after the end of the quarter," said Stephen Carl, head equity trader at Williams Capital Group.
Monday marked a light day before economic data reports heat up later this week. Investors likely will pay close attention to central-bank meetings in Japan and Europe this week.
The European Central Bank on Thursday will hold its first meeting since the turbulent bailout of Cyprus was finalised March 24. Traders will look to the bank's statement for signs of any forthcoming policy changes that might support growth in the eurozone. The Bank of Japan also will convene Thursday under new leadership. Investors will watch for signs of a shift by the new governor toward bolder actions and looser monetary policy.
The US government's monthly jobs report will cap off the week as market watchers look to see whether hiring maintained February's momentum. Economists expect a slowing in the pace of non-farm payroll gains. The median forecast in a survey compiled by Dow Jones Newswires is for 200,000 jobs to have been created last month. In February, there were 236,000 new hires, far exceeding expectations. The March unemployment rate is expected to hold at 7.7 per cent. The Federal Reserve has said it won't start raising interest rates until the unemployment rate falls to 6.5 per cent.
"Everyone has been hearing about new highs and what a great quarter the first quarter was, that I think you have some investors wanting to sit back and see how the new quarter starts," said Richard Sichel, chief investment officer at Philadelphia Trust Co., which manages $US1.8bn in assets. Mr. Sichel said he is looking back at last quarter's underperformers and outperformers, but waiting to see how the second quarter progresses before shifting investments.
May crude-oil futures shed 0.2 per cent to finish at $US97.07 a barrel, while April gold futures settled 0.3 per cent higher at $US1600 an ounce. The dollar lost ground against the yen, but rose against the euro. Demand for Treasurys rose, sending the yield on the benchmark 10-year note down to 1.84 per cent.
In corporate news, shares of Tesla Motors climbed $US6.04, or 16 per cent, to $US43.93 after the electric-car maker said it expected to report an adjusted first-quarter profit, compared with expectations of a loss, on the back of better-than-expected sales of its Model S vehicle.
Intel dropped US41c, or 1.9 per cent, to $US21.43 following weaker-than-usual chip sales data from the Semiconductor Industry Association over the weekend and a downgrade to "market perform" by JMP Securities.
Panasonic slipped US62c, or 8.5 per cent, to $US6.71 after The Wall Street Journal reported US authorities are investigating whether a unit of the Japanese electronics giant paid bribes to land business. The company also said Monday that the date for its delisting of American depositary shares from the New York Stock Exchange is April 22.
eBay gained $US1.49, or 2.8 per cent, to $US55.71 after Canaccord Genuity upgraded the online auction site's stock to "buy" and JPMorgan raised its price target on the shares to $US64.
Gastar Exploration rallied US25c, or 14 per cent, to $US2.01 after the company agreed to buy back Chesapeake Energy's entire stake in Gastar, certain Chesapeake assets in Oklahoma and settle all litigation for $US85 million. Chesapeake shares slipped.
Quicksilver rose US35c, or 16 per cent, to $US2.60 after the company announced over the weekend that it agreed to sell a 25 per cent interest in certain oil and gas assets for $US485m to a subsidiary of Tokyo Gas.
