NEW YORK?US stocks ended lower Monday after a rally fueled by China's decision to allow its currency to float more freely lost momentum before the market closed.
The Dow Jones Industrial Average fell 8.23 points (0.08 percent) to close at 10,442.41 after surging more than 140 points.
The tech-rich Nasdaq index dipped 20.71 points (0.90 percent) to 2,289.09 and the broad-market S&P 500 index slipped 4.31 points (0.39 percent) at 1,113.20.
Stocks surged from the opening bell with sentiment boosted by a weekend decision by Beijing allowing the currency more flexibility in what was widely seen as a bid to head off a spat with Washington at this weekend's G20 summit in Canada.
"The news propelled stocks higher right out of the gate, but bulls had trouble maintaining their positive momentum," said analyst Elizabeth Harrow of Schaeffer's Investment Research.
"A general lack of specifics from China regarding its new currency policy created uncertainty, and stocks surrendered to selling pressure by the close," she said.
Despite saying it wants the yuan to be flexible, Beijing has yet to make any formal announcements related to actually un-pegging it against the dollar, analysts at Briefing.com said in a note to clients.
"Already the government there has restricted any substantial immediate movement in the currency by allowing only a 0.5 percent move in either direction per day," they said.
The United States accuses Beijing of gaining an unfair advantage in trade by skewing its forex rate.
The yuan hit its strongest level in five years in Chinese trading Monday, rising to about 6.7969 to the dollar but still within Beijing's tight trading band.
In 2005, China made its currency slightly flexible and allowed the yuan to appreciate about 20 percent against the dollar.
But three years later, it began to effectively peg the yuan at 6.8 to the dollar to support its exporters reeling from the global financial crisis.
US stocks had ended the week on Friday more than two percent higher amid optimism over the global economic recovery.
Some commodity-linked stocks managed to maintain their gains at the close Monday on expectations that demand in China will rise.
Aluminum producer Alcoa rose 5.49 percent to $11.72 while Chevron gained 0.26 percent to $75.72 and construction equipment manufacturer Caterpillar was up 0.33 percent to $66.07.
Walt Disney dipped 0.26 percent to $35.06 even after "Toy Story 3" netted its biggest-ever opening revenue, with an expected box office haul of some $109 million.
The movie is the latest chapter of the popular tale of toys come to life from pioneering digital studio Pixar.
Bond prices also declined. The yield on the 10-year US Treasury bond rose to 3.243 percent from 3.223 percent on Friday while that on the 30-year bond climbed to 4.164 percent from 4.149 percent. Bond yields and prices move in opposite directions.
