By msnbc.com news services
U.S. stocks edged lower at Monday’s open following data showing a decline in European private sector activity and a lower growth target for China gave investors reason to pause after 3 weeks of gains.
European stocks dropped, with shares in euro zone peripheral countries such as Italy and Spain among the worst hit, after data showed the region was likely to slide back into recession.
Chinese Premier Wen Jiabao cut his nation's 2012 growth target to an 8-year low of 7.5 percent and put a priority on boosting consumer demand in hopes of weaning the economy off a reliance on external demand and foreign capital.
"China lowering its growth rate to 7.5 percent is sending a chill factor across Asian and European markets and it's going to take its toll here in the United States," said Peter Cardillo, chief market economist at Rockwell Global Capital.
"Everyone knows European growth will be weak. The question is how weak will be the periphery nations."
The S&P 500 is up 25 percent from closing lows in October, even after a few pullbacks. Investors have shown a tendency to buy on weakness.
"I would recommend buying on dips because I think we will continue to see the jobs growth showing improvement," said Cardillo.
European markets were also pressured ahead of a March 8 deadline for Greece and private bondholders to complete a debt swap. Failure to reach agreement would put the country back on the brink of a messy default.
Reuters contributed to this report.
