Stocks fell Monday after more signs of slowing economic growth got investors worried ahead of a key report on jobs later this week.
The Dow Jones industrial average lost ground throughout the day and closed with a loss of 141 points. Other indexes also fell more than 1 percent. Bond prices rose, sending interest rates lower, as money moved back into the Treasury market.
The latest cause for worry on the economy came in a report early Monday showing that personal incomes rose less than expected in July. That added to a series of discouraging economic indicators recently suggesting that growth could slow down in the second half of the year.
"The personal income report did little to ease the nervousness about the trajectory of the economy," said Alan Gayle, senior investment strategist at RidgeWorth Investments. The report did show spending was up in July, but without consistent growth in income, any increase in spending is likely temporary, Gayle said.
Investors have been focusing on employment data as a way of predicting where the economy is going. Signs of a slowdown in growth has plagued the market for more than a month. Investors are unsure if companies will be able to keep up strong earnings growth if the recovery runs out of steam or falls back into recession.
"You have to prepare for slower growth," said Mark Tepper, managing partner at Strategic Wealth Partners. "As consumer spending goes down, businesses will experience lower earnings."
Investors have been betting in recent weeks that the weaker economic reports will translate into smaller earnings than previously thought. That, in turn, has helped drive stocks lower to match the diminished expectations.
The Dow fell 140.92, or 1.4 percent, to close at 10,009.73. The Standard & Poor's 500 index fell 15.67, or 1.5 percent, to 1,048.92, while the Nasdaq composite index fell 33.66, or 1.6 percent, to 2,119.97.
About four stocks fell for every two that rose on the New York Stock Exchange, where volume was very light at 820 million.
The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.53 percent from 2.65 percent late Friday. That yield helps set interest rates on mortgages and other consumer loans.
Biotechnology company Genzyme said Sanofi-Aventis' $69 per share offer undervalues the company. Genzyme shares jumped $2.29, or 3.4 percent, to $69.91, while Sanofi fell 29 cents to $28.63.
Cogent jumped $2.18, or 24.4 percent, to $11.09 after manufacturer 3M said it would buy the maker of fingerprint scanners for $10.50 a share. Shares of 3M dipped $1.35 to $79.65.
Hewlett-Packard said it plans to repurchase $10 billion in stock. The computer company plans to buy back shares, in part, to offset dilution from employee stock plans. Hewlett-Packard shares rose 56 cents to $38.56.
Stocks have largely been moving on major economic reports and less on individual corporate news during the past month. Because the Labor Department's monthly employment report doesn't come until Friday, investors will look for signs earlier in the week about the jobs market. A report on private employment comes out Wednesday, and first-time claims for unemployment insurance for last week will come out on Thursday.
On Monday, the Commerce Department said personal income rose 0.2 percent last month, falling below economists' forecast for 0.3 percent growth, according to Thomson Reuters.
Japanese markets surged after the country's central bank approved new stimulus measures aimed at sparking growth and putting the brakes on a strengthening yen. The yen recently hit a 15-year high against the dollar, which hurts Japanese manufacturers, like Sony Corp., Panasonic Corp. and Toyota Motor Corp., that rely heavily on exports. Japan's Nikkei stock average rose 1.8 percent.
