* Both S&P 500 and Dow coming off record closing highs
* Tesla Motors rallies after profit outlook
* European markets closed
* Indexes off: Dow 0.20 pct, S&P 0.58 pct, Nasdaq 0.90 pct
By Chuck Mikolajczak
NEW YORK, April 1 U.S. stocks declined on Monday
after weaker-than-expected U.S. manufacturing data gave
investors reason to book profits after both the Dow and S&P 500
set record closing highs in the prior session.
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.
"We went into the first quarter with all the concern about
the fiscal cliff, people had adjusted expectations lower, now
expectations have come back up, so it's going to be a little bit
tougher hurdle right now," said Peter Jankovskis, co-chief
investment officer at OakBrook Investments LLC in Lisle,
"When you have that sort of a record run, the market
finishes at an all-time high for the quarter, it's not unusual
to see some profit taking."
The benchmark S&P index remains within 16 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 U.S. payrolls 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.
For the year, the S&P is up 9.5 percent, the Dow is up 11.1
percent and the Nasdaq is up 7.4 percent.
With the strong start to the year, many investors have
anticipated a pullback, with the market potentially facing more
downside risks as uncertainty over the economic situation in
Cyprus continues. European markets were closed on Monday for a
But with economic data not showing especially strong
readings, investors speculate the Federal Reserve will continue
the stimulus measures that have helped put a floor in equity
prices and limiting dips.
The Dow Jones industrial average dropped 29.42
points, or 0.20 percent, to 14,549.12. The Standard & Poor's 500
Index lost 9.04 points, or 0.58 percent, to 1,560.15. The
Nasdaq Composite Index fell 29.32 points, or 0.90
percent, to 3,238.20.
In company news, Tesla Motors Inc surged 18.1
percent to $44.74 after forecasting full profitability in the
first quarter, citing strong sales of its Model S sedan.
Apple Inc shares fell 2 percent to $433.83 and were
the biggest drag on both the S&P 500 and Nasdaq 100
indexes. Portfolio manager Will Danoff, whose $92 billion
Fidelity Contrafund is the largest active shareholder in Apple,
cut the fund's stake in the iPhone maker 10 percent during the
first two months of 2013.
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 0.6 percent to $14.25.