NEW YORK?US stocks slumped Monday over weak consumer spending figures and ahead of key data later this week expected to show the US economic recovery is slowing down.
The Dow Jones Industrial Average was down 140.92 points (1.39 percent) to 10,009.73 in closing trade, while the broader S&P 500 index lost 15.67 points (1.47 percent) to 1,048.92.
The tech-rich Nasdaq composite index shed 33.66 points (1.56 percent) to 2,119.97 as daily trade volume remained low.
Commerce Department data showed consumer spending rose 0.4 percent and incomes rose 0.2 percent last month, largely in line with forecasts.
Consumer spending is a key driver of US economic growth, usually accounting for two-thirds of output.
"The majority of the decline was simply because of this morning's numbers. We got some very disappointing income numbers, and figures showing spending is outpacing income," FTN Financial analyst Lindsey Piegza told AFP.
All eyes will turn to the release of the monthly employment data on Friday, with most analysts forecasting non-farm payrolls to fall by 118,000 in August and unemployment to edge up to 9.6 percent from the current 9.5 percent rate.
On Wednesday, the Institute for Supply Management index is expected to show slower manufacturing output.
Wall Street had rallied on Friday after Federal Reserve chief Ben Bernanke offered reassurances the US central bank was ready to step in if the economy faltered.
In a highly anticipated speech, Bernanke said that the sluggish pace of the US economic recovery was weaker than expected and promised "unconventional" steps to boost growth if the economic outlook "deteriorated significantly."
He nevertheless said that prospects for a US growth pick-up in 2011 appeared to "remain in place" despite a sharp cutback in the pace of second quarter economic expansion.
Monday opened with a slew of news on mergers and acquisitions.
Computer giant IBM announced the acquisition of Storwize, which specializes in data storage and organization, for an undisclosed sum.
Microchip bellwether Intel further announced it had entered into a definitive agreement to buy Infineon's Wireless Solutions for some $1.4 billion as Intel eyes the mobile phone market.
Industrial conglomerate 3M announced the acquisition of biometric technology firm Cogent Systems for $943 million.
Finally, the US biotechnology firm Genzyme said it had rejected an $18.5-billion takeover offer from French pharmaceutical giant Sanofi-Aventis.
Among the stocks in focus, United Airlines shares rose by 1.27 percent and Continental Airlines's stocks were up 0.41 percent after the Justice Department Friday gave its green light to the two companies' three billion dollar merger.
Computer-making giant Hewlett-Packard saw its stocks rise by 1.47 percent after it had announced a 10 billion stock buyback.
The bonds market was higher.
The yield on the 10-year US Treasury bond was down to 2.545 percent from 2.652 percent on Friday while that on the 30-year bond fell to 3.602 percent from 3.698 percent. Bond yield and prices move in opposite directions.
