Stocks slid on Friday as data that showed the manufacturing sector contracted overshadowed a stronger-than-expected reading on consumer confidence.
With the market on a strong run since the early March bear market low, investors are choosing to book some gains.
I think people are starting to feel they need to take profits on some on the gains they've had, said Angel Mata, managing director of listed trading at Stifel Nicolaus Capital Markets in Baltimore.
I wouldn't be surprised to see the psychology shifting from 'I don't want to miss the move' to 'I should be taking profits here.'
Data showed the U.S. factory sector shrank further in April, but at a slower pace, and consumers felt more confident about the economy last month than at any time since September. Also, new orders received by factories declined last month.
The Standard & Poor's 500 Index closed out its best month in nine years on Thursday, gaining 9.4 percent for April on hopes the worst was over for the financial sector and recession-hit economy.
The Dow Jones industrial average <.DJI> fell 64.27 points, or 0.79 percent, to 8,103.85. The S&P 500 <.SPX> lost 6.37 points, or 0.73 percent, to 866.44. The Nasdaq Composite Index <.IXIC> gave up 13.75 points, or 0.80 percent, at 1,703.55.
(Reporting by Leah Schnurr; additional reporting by Edward Krudy; editing by Jeffrey Benkoe)