U.S. stocks declined on Monday, with the Dow and S&P 500 retreating after an eight-week winning stretch, as investors took a cautious stance ahead of Friday's jobs report while considering a mixed start to the holiday shopping season.
"We were kind of expecting a down week after eight weeks of being up. There is not a whole lot of incentive to put capital at risk, especially with the jobs report on Friday," said Ian Kerrigan, a Seattle-based investment specialist at J.P. Morgan Private Bank, referring to the non-farm payrolls report for November.
"We've had such a strong year, if the market wants to take a break in December, it's well deserved," Kerrigan added of year-to-date gains that have the Dow up 22 percent, the S&P 500 ahead more than 26 percent and the Nasdaq up 34 percent.
The Dow Jones Industrial Average fell to close unofficially 77 points lower, with losses led by 3M.
After meandering just above and below its record close of 1,807.23 set on Nov. 27, the S&P 500 also declined nearly 5 points, with telecommunications pacing declines that included eight of the S&P's 10 major industry groups.
After rising for six consecutive sessions, the Nasdaq dropped 14 points.
EBay rose after researcher ComScore reported online spending on Black Friday gained 15 percent to a record $1.2 billion.
But the overall holiday shopping season got off to a more tepid start. The National Retail Federation estimated that retail sales fell by 2.7 percent during the full Thanksgiving weekend to $57.4 billion.
"We suspect shoppers taking advantage of early 'Black Friday' sale prices cut into weekend totals," wrote Fred Dickson, chief investment strategist at Davidson Companies.
Amazon.com and Overstock.com slid after the U.S. Supreme Court rejected an appeal from the online retailers in a case involving Internet sales tax.
Dow Chemical shares climbed 2 percent after it announced its plan to sell parts of its commodities chemicals business, representing about $5 billion in annual sales.
The Institute of Supply Management's survey index showed manufacturing rose to 57.3 last month from 56.4 in October. Analysts had expected the index to drop to 55.0. Readings above 50 illustrate expansion.
"The national ISM didn't reflect the moth-over-month moderation seen in most regional surveys and likely is in response to continued stabilization in Europe, China, and signs of life in Japan and optimism that we will likely not see again more drama in D.C.," emailed Peter Boockvar, chief market analyst at the Lindsey Group.
A separate report showed construction spending climbed 0.8 percent in October.
The dollar gained against other global currencies and the 10-year Treasury yield rose to 2.8 percent.
"I don't think 2.8 on the 10-year is particularly threatening. There is a level that is too high, we're just not there," said Dan Greenhaus, chief global strategist at BTIG LLC, of the benchmark used in determining mortgage rates and other consumer loans.
On the New York Mercantile Exchange, gold futures fell, with the most active contract down $28.50, or 2.3 percent, to $1,221.90 an ounce.
Crude-oil futures rose $1.10, or 1.2 percent, to $93.82 a barrel.
"For the stock market the story is seasonality; December is one of the best months of the year," said Greenhaus, noting that Wall Street has gained roughly 75 percent of the time in the final month of the year.
"It's a really strong month, so to start the month, that's probably the story. Then you add in the less provable numbers like performance chasing and window dressing," Greenhaus added.