US stocks have finished decisively lower, retreating from last week's records in a decline attributed to profit taking and anxiety about Chinese economic growth.
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The Dow Jones Industrial Average on Monday dropped 107.06 points (0.62 per cent) to 17,172.68.
The broad-based S&P 500 fell 16.11 (0.80 per cent) to 1,994.29, while the tech-rich Nasdaq Composite Index sank 52.10 (1.14 per cent) to 4,527.69.
Sam Stovall, chief investment strategist at S&P Capital IQ, said investors "were in need of some near-term rest" after the Dow and S&P 500 hit new record highs last week amid a stay-put Federal Reserve policy decision, the Scottish vote against independence and Chinese Internet giant Alibaba's record initial public offering.
"People are taking profits," said Michael James, managing director of equity trading at Wedbush Securities.
Analysts also cited a surprising decline in US existing-home sales in August and worries about Chinese manufacturing data due to be released on Tuesday.
Homebuilder stocks fell sharply after the National Association of Realtors said existing-home sales fell 1.8 per cent in August, following four straight months of gains.
Toll Brothers tumbled 3.1 per cent and KB Home and Lennar both fell 2.8 per cent.
Alibaba, the Chinese online commerce company, fell 4.3 per cent in its second day of trade.
The company shot up nearly 40 per cent in its premiere session Friday.
Yahoo, which holds a 22.4 per cent stake in Alibaba, dropped 5.6 per cent.
Analysts say the ability of money managers to directly invest in Alibaba removes a key selling-point for Yahoo.
Other technology companies fell in the Nasdaq sell-off, including Amazon (-2.1 per cent), Netflix (-3.2 per cent), Priceline (-1.7 per cent) and Tesla Motors (-3.6 per cent).
US oilfield supplier Dresser-Rand gained 2.6 per cent after Germany's Siemens announced it would buy the company for $US7.6 billion ($A8.2 billion).
Another German company, pharmaceuticals maker Merck KGaA, said it would buy US specialty chemicals firm Sigma-Aldrich for $US17 billion. Sigma-Aldrich bolted 33.2 per cent higher.
Detergent and household-goods manufacturer Clorox jumped 7.4 per cent after announcing it was shutting its Venezuelan operation, which became unprofitable due to government price controls on its products.
The company also confirmed its 2015 profit outlook.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.57 per cent from 2.59 per cent Friday, while the 30-year declined to 3.29 per cent from 3.30 per cent. Bond prices and yields move inversely.
AFP
