Stocks fell in the year's lightest volume on Monday as worries about the pace of economic recovery overshadowed data showing a rise in consumer spending and income.
The uncertainty weighed more on sectors associated with growth, including banks and consumer discretionary stocks. Bank of America
U.S. consumer spending rose at the strongest pace in four months in July while a smaller rise in incomes was less than forecast. The expectation that data this week will confirm the economy shed jobs in August also kept investors at bay.
The consumer doesn't have the capacity to grow at a big rate, said Malcolm Polley, president and chief investment officer of Stewart Capital Advisors in Indiana, Pennsylvania.
There's no incentive for people to spend. They continue to pay down debt, and that points to slower-than-desired economic recovery.
The Dow Jones industrial average <.DJI> dropped 140.92 points, or 1.39 percent, to 10,009.73. The Standard & Poor's 500 <.SPX> lost 15.67 points, or 1.47 percent, to 1,048.92. The Nasdaq Composite <.IXIC> fell 33.66 points, or 1.56 percent, to 2,119.97.
About 5.6 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, the slowest day for Wall Street in volume so far this year.
Chipmakers weighed on the Nasdaq after Intel Corp
The PHLX semiconductor index <.SOX> lost 2.5 percent, its largest drop since August 11.
Shares of United Airlines parent UAL Corp
In other merger-related news, U.S. biotech company Genzyme Inc
U.S. President Barack Obama's attempt to address worries the recovery is faltering appeared to fall short.
Obama said he had discussed additional steps to help the recovery with his advisers, but the speech did not promise any
concrete measures, and stocks extended losses afterward.
Investors were also hesitant ahead of closely watched data on manufacturing, services and the August non-farm payrolls report due later in the week, which are expected to confirm the economy's growth is slowing.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 7 to 2, while on the Nasdaq, about four stocks fell for every one that rose.
(Reporting by Rodrigo Campos; Additional reporting by Ryan Vlastelica; Editing by Kenneth Barry)