With top economic indicators, including payrolls, out of the way, equities had little in the way of catalysts. The recent strength in the U.S. dollar and continued weakness in the European economy cast a shadow over the earnings season that is about to begin.
"Markets are reflecting nervousness around third-quarter earnings given the strong dollar and a very weak macro environment in Europe," said Jim Russell, senior equity strategist for U.S. Bank Wealth Management, which manages $120 billion in assets out of in Cincinnati.
"It is very possible that estimate cuts are in front of us," he said.
Micron (>> Micron Technology, Inc.) shares fell 4 percent to $32.57 after Samsung unveiled plans to spend $14.7 billion on a new semiconductor facility.
Hewlett-Packard (>> Hewlett-Packard Company) posted the S&P 500's largest gains, up 4.7 percent to $36.87 after it said it would split into two listed companies and eliminate another 5,000 jobs.
GT Advanced Technologies (>> GT Advanced Technologies Inc), Apple's (>> Apple Inc.) partner in a sapphire glass plant in Arizona, said it had filed for voluntary bankruptcy protection and its shares tumbled 92.8 percent to 80 cents.
The Dow Jones industrial average <.DJI> fell 17.78 points, or 0.1 percent, to 16,991.91, the S&P 500 <.SPX> lost 3.08 points, or 0.16 percent, to 1,964.82 and the Nasdaq Composite <.IXIC> dropped 20.82 points, or 0.47 percent, to 4,454.80.
The S&P 500 was unable to hold above 1,975, "which is proving to be a real resistance point," said Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.
The benchmark's 50-day moving average stands just below 1,975 and it has closed below that average for five straight sessions.
About 6.3 billion shares changed hands on U.S. exchanges, below the 7.2 billion average for the last five sessions, according to data from BATS Global Markets.
The largest percentage gainer on the New York Stock Exchange was CareFusion (>> CareFusion Corporation), up 22.9 percent after medical equipment supplier Becton Dickinson (>> Becton, Dickinson and Co.) agreed to buy it for $12.2 billion in cash and stock.
On the Nasdaq, a top mover was also related to an acquisition, with Durata Therapeutics (>> Durata Therapeutics Inc) up 74.6 percent to $24.24. Actavis (>> Actavis PLC) said it would buy Durata for about $675 million.
Among the most active stocks on the NYSE were Petrobras
On the Nasdaq, Sunesis Pharmaceuticals (>> Sunesis Pharmaceuticals, Inc.), down 76.4 percent to $1.57, joined GT Advanced Tech and Micron among the most heavily traded.
Advancing issues outnumbered declining ones on the NYSE by 1,676 to 1,383, for a 1.21-to-1 ratio on the upside; on the Nasdaq, 1,612 issues fell and 1,044 advanced for a 1.54-to-1 ratio favoring decliners.
(Reporting by Rodrigo Campos; Editing by Nick Zieminski)
By Rodrigo Campos
