NEW YORK (TheStreet) -- U.S. stock markets dipped Tuesday afternoon after fluctuating between gains and losses for much of the day as investors returned from the U.S. Labor Day weekend to a trio of good U.S. economic reports.

The ISM manufacturing index hit a stronger-than-anticipated 59 in August, while construction spending rebounded by a more-than-forecast 1.8% in July. The Markit PMI manufacturing index, at 57.9 in August, increased to its highest level since April 2010.

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Off their intraday lows following the economic news, the Dow Jones Industrial Average was down 0.4% to 17,030.69 and the S&P 500 was down 0.34% to 1,996.52. The S&P hit a new intraday high of 2,006.12 before pulling back. The Nasdaq was down 0.02% to 4,579.33.

"Investors are going to have to figure out how they feel about better economic data in the context of less Fed accommodation. Assuming forecasts hold, this is going to be the struggle as the year progresses," said Dan Greenhaus, chief strategist at BTIG.

The Federal Reserve is expected to keep a close eye on Friday's August nonfarm payrolls report. The central bank's labor market conditions index that was referenced by Fed Chair Janet Yellen in her Jackson Hole, Wyo., speech sources much of its data points from these numbers.

In the eurozone, the attention was being squarely focused on Thursday's meeting of the European Central Bank and hopes of moves toward a policy of quantitative easing.

U.S. equities closed slightly higher on Friday, capping four straight weekly gains and booking their best August since 2000, despite geopolitical concerns weighing on the markets. The close also marked the biggest monthly gain since February. The S&P 500 struck a new closing high on Friday.

While September is often viewed with a degree of skittishness by investors -- it is the only month with negative average returns dating back to 1980 -- the S&P has actually been up in eight of the last 10 Septembers and 63% of Septembers since 1995. Average returns have been skewed by outliers, making the month's positive median gain more relevant focus on, said Greenhaus.

In corporate news, Dollar General (DG) raised its offer for Family Dollar (FDO) on Tuesday to $80 a share, or $9.1 billion, from $78.50 a share. Dollar General rose 0.67% to $64.42. Family Dollar was up 0.57% to $80.29.

Norwegian Cruise Line (NCLH) said it will acquire Prestige Cruises International, the parent company of Oceania Cruises and Regent Seven Seas Cruises, for $3.025 billion. Norwegian Cruise Line surged 11.08% to $37.

France's Iliad may improve its $15 billion offer for T-Mobile US (TMUS) but has set specific limits on how much money it would raise to fund any deal, Reuters reported. T-Mobile gained 0.73% to $30.30.

Apple (AAPL) rose 0.81% to $103.33, adding to gains ahead of its Sept. 9 press event where it's widely expected to confirm that the next iPhone, which may be called the iPhone 6 or the iPhone Air, will officially go on sale later this month.

United States Oil Fund (USO) was down 2.63% to $34.81 while the SPDR Gold Trust (GLD) was off 1.86% to $121.55. tock Market Today: S&P Books Best August Since 2000 Despite Geopolitical Threats 

--By Andrea Tse in New York

Follow @AndreaTTse