The indexes had been creeping higher early in the day, then reversed course soon after a regional manufacturing report came in much weaker than analysts had expected. A survey of manufacturing by the Dallas branch of the Federal Reserve showed a steep drop in July. Economists had forecast a modest gain.
Two corporate deals announced early Monday pushed some stocks higher. Chicago Bridge & Iron Co. agreed to buy Shaw Group for $3 billion in cash and stock. Shaw jumped $14.80, or 55 percent, to $41.49.
Medical and industrial equipment maker Roper Industries said it plans to buy hospital software company Sunquest Information Systems for $1.42 billion. Roper also raised its earnings estimate for the year, a result of the pending merger and a stronger dollar. Roper gained 1 percent to $99.64. Sunquest is privately owned.
History suggests the stock market could head higher in the coming months, said Sam Stovall, chief equity strategist at S&P Capital IQ. Stocks usually hit their annual peak in the second half of the year. But Stovall said economic reports and earnings estimates "point to a more challenging period ahead."Of the 294 companies in the S&P 500 that have reported earnings so far, 195 have surpassed analysts' expectations. But the bar was set low. Analysts now expect quarterly profits will sink 0.25 percent and revenue will rise just 1.9 percent compared with the year before, according to S&P Capital IQ. That would be the worst earnings season since the summer quarter of 2009. Among other stocks making big moves: â¿¿ Supermarket operator Supervalu rose 13 percent, or 25 cents, to $2.24 after the company announced that it would oust its CEO. Earlier this month, the Minneapolis company reported weaker sales and profits and suspended its dividend. Supervalu also said it may put itself up for sale.