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New York - US stocks finished decisively lower on Monday, retreating from last week's records in a decline attributed to profit taking and anxiety about Chinese economic growth.
The Dow Jones Industrial Average dropped 107.06 points (0.62%) to 17 172.68.
The broad-based S&P 500 fell 16.11 (0.80%) to 1 994.29, while the tech-rich Nasdaq Composite Index sank 52.10 (1.14%) to 4 527.69.
Sam Stovall, chief investment strategist at S&P Capital IQ, said investors "were in need of some near-term rest" after the Dow and S&P 500 hit new record highs last week amid a stay-put Federal Reserve policy decision, the Scottish vote against independence and Chinese Internet giant Alibaba's record initial public offering.
"People are taking profits," said Michael James, managing director of equity trading at Wedbush Securities.
Analysts also cited a surprising decline in US existing-home sales in August and worries about Chinese manufacturing data due to be released Tuesday.
Homebuilder stocks fell sharply after the National Association of Realtors said existing-home sales fell 1.8% in August, following four straight months of gains. Toll Brothers tumbled 3.1% and KB Home and Lennar both fell 2.8%.
Alibaba, the Chinese online commerce company, fell 4.3% in its second day of trade. The company shot up nearly 40% in its premier session on Friday.
Yahoo, which holds a 22.4% stake in Alibaba, dropped 5.6%. Analysts say the ability of money managers to directly invest in Alibaba removes a key selling-point for Yahoo.
Other technology companies fell in the Nasdaq sell-off, including Amazon (-2.1%), Netflix (-3.2%), Priceline (-1.7%) and Tesla Motors (-3.6%).
US oilfield supplier Dresser-Rand gained 2.6% after Germany's Siemens announced it would buy the company for $7.6bn.
Another German company, pharmaceuticals maker Merck, said it would buy US speciality chemicals firm Sigma-Aldrich for $17bn. Sigma-Aldrich bolted 33.2% higher.
Detergent and household-goods manufacturer Clorox jumped 7.4% after announcing it was shutting its Venezuelan operation, which became unprofitable due to government price controls on its products. The company also confirmed its 2015 profit outlook.
Bond prices rose. The yield on the 10-year US Treasury fell to 2.57% from 2.59% on Friday, while the 30-year declined to 3.29% from 3.30%.
