Stocks dipped on Monday as confidence about the economy sagged and investors were cautious ahead of several key reports coming this week.
Investors were eyeing comments on the economy by President Barack Obama, set for 12:30 p.m. Before the speech, bank stocks took the brunt of selling. JP Morgan
Consumer spending rose at the strongest pace in four months in July, but the 0.2 percent gain in personal incomes reported by the government on Monday was smaller than forecast.
Investors also were hesitant ahead of more closely watched data on manufacturing, services and August non-farm payrolls due later in the week.
Equity markets are going to be a little bit defensive this week as the economic data is likely going to show more slowing in the economy, said John Brady, senior vice president at MF Global in Chicago.
The Dow Jones industrial average <.DJI> dropped 70 points, or 0.7 percent, to 10,080. The Standard & Poor's 500 Index <.SPX> dropped 8 points, or 0.7 percent, to 1,057. The Nasdaq Composite Index <.IXIC> dropped 15 points, or 0.7 percent, to 2,138.
The Dow and the S&P 500 racked up three weeks of losses at the end of last week although the market is showing resilience around a key technical level.
The S&P 500 fell to and then rebounded from the 1,040 support level twice during the past week, both times ending the day with gains. The level has consistently attracted buyers over the past 10 months and was significantly breached only once during a brief stint in July.
The financial sector has been the subject of intense scrutiny from Washington recently and investors are nervous ahead of potential new policy announcements.
However, Obama's statement is likely aimed at reminding Americans that he is still focused on fixing the economy, the top issue in the November 2 congressional elections.
Citigroup fell 1.1 percent to $3.72, while JP Morgan fell 1.1 percent to $36.19. The BKW Bank Index lost 1.34 percent.
A burst of M&A action was not enough to turn stocks positive despite a brief spell around break-even shortly after the open.
Separately, HP authorized an additional $10 billion in share repurchases. HP gained 3.1 percent to $39.19.
3M shares dipped 0.8 percent to $80.36 as the top drag on the Dow.
(Reporting by Edward Krudy; Editing by Kenneth Barry)