Stock Market Today: Stocks Fall as China Dampens Stimulus Hopes

NEW YORK (TheStreet) -- U.S. stock markets were trading lower on Monday, after China's finance minister dampened stimulus hopes and U.S. home sales unexpectedly declined in August.

The Dow Jones Industrial Average was down 0.47% in early afternoon trading. The S&P 500 was off 0.88%. The Nasdaq  fell 1.39%. 

Must Read: 10 Stocks Carl Icahn Loves in 2014

Watch the video below for a closer look at how U.S. markets are doing in midday trading Monday:

WATCH: More market update videos on TheStreet TV

China's slowing industrial momentum, along with rising fears about leverage in the Chinese economy, was behind a broad slump in the global markets Monday. Lou Jiwei, China's Finance Minister, reportedly said his government has no plans to change its current policy just because recent data has been weak. 

Banyan Partners' chief market strategist Robert Pavlik said although the S&P 500 is up about 8.8% for the year, the market hasn't yet reached a top. In the short term, there's still more room to run, given that many investor uncertainties have been alleviated. Such uncertainties include soft, historical trading patterns for September, geopolitical issues, the Federal Reserve's medium-term policy outlook, and selling associated with investors freeing up cash for the Alibaba IPO, Pavlik said. 

Must Read: 10 Stocks George Soros Is Buying

Although some worries about an early rate hike are creeping back in and impacting certain sectors such as utilities, consumer staples and telecoms, Pavlik said in the long run a higher interest rate environment will be good for the economy; it would encourage banks to lend more and spur consumer action.

"For the remainder of 2014 I'm still optimistic and I continue to position my client's portfolios with a focus on growth that will arrive as the U.S. returns to a more normalized interest rate environment," said Pavlik.

If you liked this article you might like

Forecast for S&P 500, Dow Industrials Remains Bullish, These Charts Show

Dow 20,000! It Should Mean Nothing to Investors, but Then Again...

Tradebird Investors Are Bullish on U.S. Stocks but Bearish on the Euro

Why Home Depot and Boeing Stock Fell Tuesday