* Both S&P 500 and Dow coming off record closing highs
* Tesla Motors rallies after profit outlook
* European markets closed
* Indexes off: Dow 0.25 pct, S&P 0.56 pct, Nasdaq 0.78 pct
By Chuck Mikolajczak
NEW YORK, April 1 U.S. stocks declined on
Monday, with both the Dow and the S&P 500 retreating from record
closing highs the previous session after weaker-than-expected
U.S. manufacturing data.
The Institute for Supply Management's March manufacturing
reading of 51.3 continued to show expansion, but activity slowed
from the 54.2 reading in February.
A separate report showed construction spending rose more
than expected in February, gaining 1.2 percent, compared with
forecasts of a 1 percent rise.
"The ISM number is being misinterpreted, it is probably some
misunderstanding about what the number really means - the
headline doesn't look great, when in fact it is good," said Tim
Ghriskey, chief investment officer of Solaris Group in Bedford
Hills, New York.
"It looks to us like this is some profit-taking after a very
strong finish to the quarter."
The benchmark S&P index remains within 15 points of its
record intraday high of 1,576.09, but moves may be limited this
week in the absence of major catalysts before the closely
watched payroll report on Friday.
The S&P 500 ended March with a record closing high, boosted
by its best quarterly performance in a year, although the index
struggled to reach the new record in recent weeks after another
flare-up of the euro zone debt crisis.
Many investors have anticipated a pullback, with the market
potentially facing more risks to the downside as uncertainty
over the economic situation in Cyprus continues. European
markets were closed on Monday for a holiday.
But with economic data not showing especially strong
readings, investors speculate the Federal Reserve will continue
the stimulus measures that have helped backstop equity prices.
The Dow Jones industrial average was down 35.75
points, or 0.25 percent, at 14,542.79. The Standard & Poor's 500
Index dropped 8.74 points, or 0.56 percent, to 1,560.45.
The Nasdaq Composite Index fell 25.42 points, or 0.78
percent, to 3,242.10.
In company news, Tesla Motors Inc surged 22.2
percent to $46.31 after forecasting full profitability in the
first quarter, citing strong sales of its Model S sedan.
Portfolio manager Will Danoff, whose $92 billion Fidelity
Contrafund is the largest active shareholder in Apple Inc
, cut the fund's stake in the iPhone maker 10 percent
during the first two months of 2013. Apple shares fell 1.6
percent and were the biggest drag on both the S&P 500 and Nasdaq
Dell Inc warned that it would be dangerous to take
on a lot of debt and remain a public company given its worsening
profit outlook, in a sign that it views proposals from
Blackstone Group LP and billionaire investor Carl Icahn
as fraught with risk. The comments came on Friday, which was a
holiday for U.S. markets.
Shares of Dell dipped 0.5 percent to $14.26.