NEW YORK (TheStreet) -- U.S. stocks edged lower Monday, with global player Alcoa leading losses on the Dow Jones Industrial Average, after China said it would see a slower growth rate this year.


Dow Jones Industrial Average

closed down 14.8 points, or 0.1%, at 12,963 after paring losses through the afternoon. More than half of the index's 30 components posted losses, with


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Bank of America

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lagging the most.


S&P 500

closed down 5.3 points, or 0.4%, at 1364 and the


shed 25.7 points, or 0.9%, at 2950.

"The action has the feel of increased caution, but everyone is aware of how consistently we have bounced back from poor opens," says James "Rev Shark" DePorre, founder and CEO of Shark Asset Management.

Scott Redler, chief strategic officer with, said that momentum traders are watching today's market carefully. If the S&P 500 spends a lot of time below its ten-day moving average of 1366, the index could test a lower range of 1352 to 1357, he explained.

Investors sold shares after China cut its economic growth target for the year and a gauge of business activity in the eurozone shrank. Chinese Premier Wen Jiabao slashed China's 2012 economic growth target to an eight-year low of 7.5%, citing high inflation and a tepid worldwide economic outlook. The outlook has significant impact on global growth as China has been among the fastest-growing economies in recent years, outstripping developed nations such as the U.S. and U.K.

Meanwhile, the private-sector HSBC China services index showed that the country's services sector progressed at its fastest pace in four months last month, but was markedly below its long-term trend. The private-sector HSBC China Services Purchasing Managers' Index rose to a seasonally adjusted 53.9 in February from 52.5 in January.

As for the eurozone, Markit Economics said that its composite purchasing managers' index for the continent fell to 49.3 in February from the earlier estimate of 49.7 and from the previous month's reading of 50.4. The below-50 reading indicates business activity contracted last month.

London's FTSE closed 0.6% lower, and Germany's DAX declined 0.8%. In Asia, Japan's Nikkei Average closed down 0.8%, while Hong Kong's Hang Seng index settled lower by 1.4%.

In U.S. economic news, data on factory orders and non-manufacturing activity came in better-than expected. January factory orders fell 1% according to the Census Bureau. A slide of 1.6% was expected by analysts surveyed by

Thomson Reuters.

Meanwhile December's originally reported 1.1% jump in factory orders was upwardly revised to a 1.4% gain.

The Institute for Supply Management's non-manufacturing index showed a much better than expected reading of 57.3 for February, up from 56.8 in January. Analysts polled by

Thomson Reuters

were forecasting a reading of 56 for last month.

"The ISM non-manufacturing index points to a further acceleration in the pace of activity in the service sector," notes Millan Mulrain, senior U.S. strategist at TD Securities.

In corporate news,


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reached a $7.8 billion

settlement with the plaintiffs in the Gulf of Mexico oil spill case.

The company said the cost of the settlement will be paid from a $20 billion trust the company set up to cover claims related to the April 2010 Deepwater Horizon drilling rig blowout and resulting oil spill. Shares of BP rose 1% to $47.95.

American International Group

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is selling shares of its Asian unit,

AIA Group

, to raise about $6 billion to help it pay the U.S. government back for its bailout during the 2008 financial crisis. AIG is looking to sell a "significant proportion" of its 33% stake in AIA Group, according to AIA, which is listed in Hong Kong. The U.S. government owns 77% of AIG following the bailout of the giant insurer in 2008. AIG shares climbed 2.1% to $30.42.

General Motors

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will halt

production of the Chevrolet Volt for five weeks because inventories are too high.

The automaker told 1,300 employees at the Detroit-Hamtramck assembly plant of the planned March 19 through April 23 shutdown. Volt sales fell to 603 in January, down from 1,529 in December, the highest monthly total ever. In February, sales recovered to 1,023. In 2011, GM sold 7,671 Volts. Shares fell 1.8% to $25.98.

Credit Suisse

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announced plans to buy back up to $4.4 billion in stock. The buyback is part of the company's effort to comply with more stringent Swiss and Basel III capital requirements. Shares were down 1% to $27.09.

April oil futures settled up 2 cents to $106.72 a barrel as geopolitical risk offset fears of a slowdown in demand from China, the world's largest consumer of energy. In other commodities, April gold futures fell $5.90 $1,704 an ounce after a severe pullback last week.

The benchmark 10-year Treasury was down 7/32, raising the yield to 2.003%, while the U.S. dollar index was down 0.1% at $79.33.

-- Written by Andrea Tse and Chao Deng in New York.

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Andrea Tse