The decline came after a sharp advance in Friday's session, when better-than-expected July employment data pushed the S&P 500 to a 10-month high.
I think the move today is a Monday hangover from the big move last week, said Michael James, senior trader at Wedbush Morgan in Los Angeles. Given the significant strength we've seen over the last several weeks, to see a little bit of a isn't unexpected.
The retail group was a weak performer in Monday's session, falling after Goldman Sachs downgraded Best Buy to neutral.
Best Buy shares shed 5.5 percent to $37.58 while the S&P Retail index <.RLX> dropped 2.5 percent to 363.44.
The Dow Jones industrial average <.DJI> was down 64.69 points, or 0.69 percent, at 9,305.38. The Standard & Poor's 500 Index <.SPX> was down 7.36 points, or 0.73 percent, at 1,003.12. The Nasdaq Composite Index <.IXIC> was down 16.75points, or 0.84 percent, at 1,983.50.
Earlier, the Dow hit a session high at 9,371.96, less than 2 points above Friday's close.
The brief stay in positive territory came as McDonald's reported stronger-than-expected July sales, sending the Dow component's stock up 1.8 percent to $56.20.
Because the results were clearly better than expected, you're seeing a relief rally there, James said. Plus, McDonald's has been one of the weaker restaurant names over the past few weeks.
Fellow Dow component Wal-Mart inched down 0.1 percent to $49.22 after JPMorgan said the discount retailer wouldn't post any growth in second-quarter same-store sales.
The Class B shares of Warren Buffett's Berkshire Hathaway Inc fell 5percent to $3,362.99 after it reported second-quarter earnings that missed expectations late Friday, though the results were the company's best in nearly two years.
Elsewhere, Hormel Foods climbed 6.6 percent to $38.52 after it raised its full-year profit outlook.
Investors will keep hunting for signs of economic improvement when the Federal Open Market Committee releases its policy statement on Wednesday afternoon, at the end of its two-day meeting. The Fed is expected to hold interest rates near zero.
Later this week, quarterly scorecards are expected from major retailers such as Wal-Mart, J.C. Penney Co and Macy's Inc .
(Reporting by Ryan Vlastelica; Editing by Jan Paschal)