Stocks turned negative on Monday after data showed the pace of growth in the manufacturing sector slowed more than expected in July and on concerns the country's credit rating may still be downgraded despite a last-ditch debt deal in Washington.

The Dow Jones industrial average dropped 65.73 points, or 0.54 percent, to 12,077.51. The Standard & Poor's 500 Index  lost 8.60 points, or 0.67 percent, to 1,283.68. The Nasdaq Composite Index fell 14.29 points, or 0.52 percent, to 2,742.09.

(Reporting by Chuck Mikolajczak)