Investors looked warily at forecasts for poor U.S. corporate earnings and weaker growth in Asia and decided there wasn't much reason to buy stocks.
In early afternoon trading Monday, the Dow Jones industrial average was down 46 points at 13,563. The Standard & Poor's 500 index fell six points to 1,455 and the Nasdaq composite gave up 27 points to 3,108.
Companies in the S&P 500 index are expected to post an overall decline in profits for the first time in 11 quarters when earnings season starts on Tuesday, according to FactSet.
Tuesday will be the five-year anniversary of the S&P's high close of 1,565.15. It's still almost 7 percent below that level.
Stocks have been on a strong run, with the Dow up 11 percent this year and the S&P 500 — a benchmark tracked by many mutual funds — up almost 16 percent. But Asia's slowdown, Europe's problems, and now weak U.S. corporate earnings have caused some investors to wonder if the run-up has been too far, too fast.
The World Bank warned that a "more pronounced slowdown" is possible in China, the world's second-largest economy. It also cut its overall growth forecast for developing countries in Asia.
Slower growth in Asia could drag down the U.S. economy. One of the few bright points for the U.S. during the recession was tremendous growth in export demand by developing nations in Asia and other regions.
Even though the U.S. economy isn't doing badly, investors have been counting on growth in Asia for help, said Rex Macey, chief investment officer at Wilmington Trust Investment Advisors. "There was a point where we said 'Thank goodness for Asia and China. Their growth can fuel the recovery." That's not so clear anymore, he said.