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New York - US stocks were lower in early trading on Monday ahead of this week's Federal Reserve policy meeting and as Apple shares fell a day before it reports quarterly results.
The Fed is not seen raising rates at the two-day meeting but investors will scrutinize its statement on Wednesday for a bearing on when it will pull the trigger.
While Fed chair Janet Yellen has said the central bank could raise rates this year, it will do so only if there are clear signs of sustained economic growth.
Traders are pricing in only a 6% chance of rates being increased at this week's meeting and a 39% chance of a December hike, according to CME Group's FedWatch programme.
"I don't think it's anything more than an early morning breather after a nice surge in equities," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.
Investors are awaiting US home sales data, which is expected to show a decline to an annual rate of 550 000 units in September after two months of gains. The data is expected at 16:00.
Apple's shares were down 2.8% at $115.73, making it the biggest drag on the three major indices.
At 15:52, the Dow Jones industrial average was down 22.18 points at 17 624.52, the S&P 500 was down 7.3 points at 2 067.85 and the Nasdaq Composite index was down 14.91 points at 5 016.95.
Seven of the 10 major S&P sectors were down, with the energy sector's 1.3% fall leading the decliners. Oil fell on Monday on a global supply glut.
Wall Street closed higher on Friday after a rally in tech stocks helped the S&P 500 to positive territory for the year.
The three major indices touched their highest levels since early August, when China's devaluation of its currency sent global markets into a tailspin.
"For the rest of today, I would expect a quiet type of session, digesting the recent gains," Bakhos said.
Strong quarterly results from tech companies have helped improve expectations on overall US third-quarter earnings.
S&P 500 earnings are estimated to have declined a more modest 2.8% in the quarter, compared with 4.9% forecast at the start of the reporting season, according to Thomson Reuters data.
Valeant Pharmaceuticals was down 7.8% at $107.06. The company said it would set up a panel to probe allegations about its associations with specialty pharmacy distributor Philador.
Ctrip.com was up 21.7% at $90.50 after the online travel firm said it would merge with Qunar Cayman Islands. Qunar jumped nearly 11% to $44.23.
Pep Boys jumped 22.7% to $14.71 after it agreed to be acquired by Bridgestone for $15 per share.
Piedmont Natural Gas soared 35.3% to $57.13 after it agreed to be bought by Duke Energy. Duke Energy fell 1%.
Declining issues outnumbered advancing ones on the NYSE by 1 752 to 976. On the Nasdaq, 1 520 issues fell and 864 advanced.
The S&P 500 index showed 22 new 52-week highs and six new lows, while the Nasdaq recorded 54 new highs and 19 new lows.
