NEW YORK (TheStreet) -- Gains eked out midday were given up again as the Dow Industrial Average and S&P 500 retreated into the red.
The S&P 500 slid 0.71%, falling below its 200-day moving average support level of 1,905. Airlines were the worst performers of the index with Southwest Airlines (LUV) - Get Report down 5% and Delta (DAL) - Get Report falling 5.8%.
The Dow dropped 0.53% and the Nasdaq tumbled 0.67%.
It was a choppy session with investors skittish after the International Monetary Fund last week warned of global growth concerns.
"Global economies are stumbling badly," said economist Stephen Guilfoyle in his column. "It is true that the U.S. economy can be described as the cleanest wrinkled shirt in a hamper full of dirty shirts."
There was little news to move markets with no economic data due for release and bond markets and federal offices closed for Columbus Day. Earnings season won't ramp up until Tuesday.
Must Read: Here Are 20 Stocks That Could Buck the Odds and Do Well in October
"On a strategic basis I firmly believe that we are in a secular bull market that has eight to 10 years left to run," wrote Raymond James' chief investment strategist Jeffrey Saut in a note.
"However, on a tactical basis there have been numerous negative divergences ever since the U.S. dollar began its upward moon shot in July," he added. "While markets can do anything, and it doesn't necessarily mean such a [10-12%] pullback has to happen, in this business you play the odds or they carry you out in a box."
A rare bright spot, iron ore producers were jumping after the price of iron ore saw its biggest intraday increase since May. Cliffs Natural Resources (CLF) - Get Report gained 12.9%, BHP Billiton (BHP) - Get Report added 3.1% and Vale (VALE) - Get Report climbed 6.5%.
CSX (CSX) - Get Reportshares were the best performers of the S&P, spiking 7% after reportedly rejecting a merger offer fromCanadian Pacific Railway (CP) - Get Report. The combined company would have had a market cap of $62 billion. Virginia railroad companyNorfolk Southern (NSC) - Get Report was rising 2.6% on buzz surrounding the ground logistics sector.
Atlas Energy (ATLS) andAtlas Pipeline (APL) were surging 16.3% and 4.9%, respectively, after Targa Resources Partners (NGLS) agreed to acquire the oil companies for $5.8 billion, which includes $1.8 billion of debt.
Shutterfly (SFLY) - Get Report was slipping 10.6% after a potential deal to be acquired by private-equity firm Silver Lake reportedly fell through, according to Bloomberg. An offer could have valued Shutterfly at more than $50 a share.
--Written by Keris Alison Lahiff in New York.