U.S. stocks fall as data spark concern

NEW YORK (MarketWatch) � U.S. stock indexes declined Monday after investors saw reason for concern in some of the components of a U.S. services-sector gauge.

A lowered growth target from China and a survey showing contracting euro-zone business activity also weighed.

The Dow Jones Industrial Average DJIA �lost 14.76 points, or 0.1%, to 12,962.81, with 16 of its 30 components losing ground, led by aluminum maker Alcoa Inc. AA , off 3.6%.

The Institute for Supply Management�s nonmanufacturing index rose to 57.3% in February from 56.8% in January, better than expected. Read full report on accelerated growth in service sector.

Its employment index, however, slipped to 55.7% from 57.4% and its price index, which measures inflation, jumped to 68.4% from 63.5% in the prior month.

Click to Play China lowers growth target to 7.5%

China has announced it is lowering its target growth forecast to 7.5% from 8%, a move big enough to send a few tremors through global financial markets. (Photo: AP.)

�Inside some of the numbers, you see where the employment index came down a little bit and the inflation index rose a fair amount,� said Paul Nolte, managing director at Dearborn Partners in Chicago.

�Both are consistent with what we saw on the manufacturing side,� Nolte said, referring to the group�s report Thursday that showed expansion in February at the slowest pace since the first half of 2010.

Buffering losses on the Dow, International Business Machines Corp. IBM �topped $200 for the first time on a split-adjusted process, rising as high as $201.19 a share during the session.

Wall Street has been primed for a pause and during the past two weeks has gotten to a place where the average stock is correcting, but the weakness is being masked by �the Apple [Inc.] AAPL �factor in the indexes, and IBM in the Dow,� said Nolte of the technology companies� impact.

Apple shares are up more than 31% for the year, while IBM has risen 9.1% since the end of 2011. Apple on Monday closed 2.2% lower at $533.16.

The S&P 500 Index SPX �declined 5.3 points, or 0.4%, to 1,364.33, with natural-resource companies hit the hardest and consumer staples the best performing of its 10 major sectors.

The Nasdaq Composite COMP �fell 25.71 points, or 0.9%, to 2,950.48, weighed by declines in heavyweights Apple, Microsoft Corp. MSFT � and Google Inc. GOOG �

For every two stocks rising three fell on the New York Stock Exchange, where 702 million shares traded. NYSE Composite volume was about 3.4 billion.

Crude moves

On the New York Mercantile Exchange, crude-oil futures �wavered between small gains and losses before closing up 2 cents at $106.72 a barrel. Read more in Futures Movers.

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�The question being debated is whether the rise in energy prices is economically driven or speculative. It�s hard for me to tell at this point. I think it�s more speculation, but I don�t have solid evidence,� said Nolte.

A separate report Monday had orders to U.S. factories declining in January for the first time in three months. Read more.

Data from outside the U.S. also curbed investor demand for equities. China cut its growth goal to 7.5% from an 8% target, and Italy and Spain stood out as the leading trouble spots as a gauge of euro-area business activity contracted in February.

�We have a little bit of an overhang from China reducing its growth outlook. It�s not a huge decrease, but it�s going in the wrong direction,� said Nolte at Dearborn Partners. Read more on China.