By msnbc.com news services
U.S. stocks are set to slip Monday after data showed Europe's private sector activity declined last month and China cut its growth target, reigniting concerns about the strength of the global economy.
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.
The Institute for Supply Management releases its February non-manufacturing index at 10 a.m. ET, with economists in a Reuters survey forecasting a reading of 56.1 versus 56.8 in February. A weaker-than-expected manufacturing survey last week will keep investors on guard.
Also at 10 a.m., the Commerce Department releases January factory orders. Economists look for a drop of 1.5 percent after a 1.1 percent rise in the previous month.
American International Group Inc is selling part of its stake in AIA Group Ltd to raise about $6 billion to help repay a huge federal government bailout.
The S&P and Nasdaq notched their eighth week of gains out of the last nine, but momentum ran out on Friday as stocks ended the day lower in a thinly traded session.
Reuters contributed to this report.
