The Dow Jones industrial average fell 53.58 points, or 0.5%, to close at 10,729.43. The broader Standard & Poor's 500 index fell 9.84 points, or 0.81%, to close at 1,202.08. The Nasdaq composite index fell 23.29 points, or 1.07%, to end the day at 2,152.15.
Looking ahead to Tuesday, among the companies expected to report earnings are agribusiness outfit Delta and Pine Land (DLP
) and athletic footwear retailer Finish Line (FINL
In economic news, reports on December sales of cars and trucks and November factory orders will be released Tuesday morning. Two weekly reports on retail spending are also due out. The International Council of Shopping Centers and UBS bank's weekly tracking of retail sales and the Redbook survey's weekly measure of store sales at major retail chains will be released before the market opens
On Monday, expectation of mild temperatures in the northeastern U.S. pushed oil prices down. February NYMEX crude oil fell $1.33 a barrel to close at $42.12 a barrel.
On the economics front, on Monday the Institute for Supply Management released figures showing solid U.S. manufacturing growth in December. The ISM index rose to 58.6 from November's 57.8, which was in line with expectations, according to Action Economics. Notably, the employment index slipped to 52.7 from 57.6, while new orders increased to 67.4 from 61.5, possibly because of overseas demand.
The poor showing in the report's employment index, which follows a weak employment component in the December Chicago PMI report issued last week, is raising concern over the December jobs report this Friday, says S&P MarketScope.
The U.S. Commerce Department also reported Monday that construction spending dropped 0.4% in November from a revised 0.3% rise in October.
In earnings news Monday, drugs retailer Walgreen (WAG
) reported a 31% increase in quarterly profit, its largest rise in four years, thanks to higher sales of prescription drugs and general merchandise. The company's stock ended the day up 5%.
The world's biggest retailer, Wal-Mart (WMT
), announced Monday a better-than-expected December sales outlook. The company said that it expects December same-store sales to have increased 3%, after rising by 0.7% in November. Shares in the retailer closed up 1%.
Shares of construction equipment maker and Dow industrials member Caterpillar (CAT
) finished down 2.5% on the report of weak construction spending.
The pharmaceutical company Merck (MRK
) was in the news again after the Financial Times reported Monday that a scientist who has been critical of the safety the anti-inflammatory drug Vioxx plans to publish research that suggests that up to 139,000 Americans have died or been seriously injured as a result of taking Vioxx. Merck's shares closed down 2.7%.
Elsewhere in pharma, shares of drug discovery outfit AtheroGenics (AGIX
) fell 20% after the company proposed amendments to its ARISE clinical study of AGI-1067 for treatment of coronary artery disease.
Treasury prices ended mixed Monday as the gain in December ISM manufacturing was offset by the weak November construction spending reports. The yield on the benchmark 10-year note dipped slightly to 4.21%.
In currencies, the dollar rose against the euro following the ISM's report of strong manufacturing growth. At the end of trading in New York, the dollar was at $1.3465 per euro.
European stocks finished slightly higher Monday.
The London Stock Exchange was closed because of the new year holiday.
Germany's DAX index closed up 34.45 points to 4,291.53, a gain of 0.83%. The market was bolstered by a report that the German purchasing managers' index unexpectedly rose to 51.7 in December from 49.9 in November.
In Paris, the CAC 40 index also rose 34.52, or 0.9%, to 3855.68, as investors were encouraged by lower oil prices.
In Asian markets, the Tokyo Stock Exchange was closed Monday, with trade resuming Tuesday for a half-day session.
In Hong Kong, the benchmark Hang Seng Index gained 7.28 points, or 0.05%, to close at 14,237.42.