New York - US stocks closed mixed on Tuesday after a key report showed the third straight monthly contraction in the manufacturing sector, a key engine behind the economy's still-sluggish recovery.
The Dow Jones Industrial Average was down 54.90 points (0.42%), finishing at 13,035.94.
The broad-based S&P 500 slipped 1.64 (0.12%) to 1,404.94, while the tech-rich Nasdaq gained 8.10 (0.26%) at 3,075.06.
"The weakness in stocks comes as disappointing domestic manufacturing and construction spending reports added to yesterday's plethora of lackluster global reports out of the sector to foster global growth concerns," Charles Schwab & Co. analysts said.
Medicis Pharmaceutical Corporation soared 38.3% after agreeing to be acquired by Canadian firm Valeant Pharmaceuticals International in a $2.6bn cash deal.
Valeant scored a 14.7% gain.
Major automakers reported strong August US sales numbers. General Motors slipped 0.2% after beating estimates with a 10% gain in sales over a year earlier, while Ford was up 0.8% on a 13% rise and plans to boost production.
Campbell Soup was down 0.1%, off earlier gains, after reporting quarterly profit above estimates.
Caterpillar led losers on the Dow, falling 3.1%.
Heavyweight Apple supported the Nasdaq, bouncing 1.4% higher. The California gadget maker on Tuesday invited members of the media to a September 12 event in San Francisco for what is expected to be the debut of a new-generation iPhone.
Marking the first trading day of the month, Fred Dickson at DA Davidson & Co. warned that over the last 40 years, September has been the most difficult month of the year for investors.
"This September appears to be fully loaded with potential market-moving events beyond the normal beginning of the month economic data including an updated monthly employment report this Friday," he said.
Bond prices slipped. The yield on the 10-year Treasury rose to 1.58% from 1.56% on Friday, while the 30-year yield edged up to 2.69% from 2.68%. Bond yields move inversely to prices.
Fin24 on Facebook,
Twitter and Google+.