New York: US stocks fell Monday on worries over China's economic growth and whether Greece can entice enough private creditors to participate in its bond swap.
The Dow Jones industrial average fell 14 points to 12,962. The broader Standard & Poor's 500 index fell 5 points to 1,364. The Nasdaq composite index lost 25 points to 2,950.
On Monday, China's premier Wen Jiabao lowered the economy's growth target to 7.5 percent from the 8 percent it has stood at for years. Investors are particularly worried of the effect of a slowdown in China's economy on global growth. In recent years, China's growth helped shore up the global economy in the wake of a banking crisis, a deep US recession and debt problems in Europe.
The news hurt stocks of large US materials companies that derive significant earnings from China like heavy equipment maker Caterpillar (CAT), which was off over 1 percent, and aluminum maker Alcoa (AA), off 3 percent.
Further weighing on sentiment are worries that Greece's bond swap may not be going according to plan, with particular concerns over participation by the private sector. Results are due late Thursday.
Shortly after the market opened, 12 of the biggest investors in Greek bonds said they would commit to participate in debt relief, a banking group in Brussels said. That could help stocks as the day progresses.
In a sign that not all's well in the US economy either, the Commerce Department said factory orders fell 1 percent in January. Businesses sharply reduced orders for machinery and other core capital goods in January after a tax credit expired, pushing US factory orders down by the largest amount in 15 months. However, that report was mostly offset by a February survey of purchasing managers at service firms nationwide.
That report said service companies grew at the fastest pace last month in a year, helped by stronger demand for new orders and a pick up in hiring.
In recent months markets have been lifted by signs of improvement in US economic reports. US stock indexes have been trading at their highest levels since before the collapse of investment bank Lehman Bros. in 2008.
However, traders are watching closely for any signs that the US economy might be losing steam.
Banks and energy stocks also fell Monday. Wells Fargo (WFC) and Morgan Stanley (MS) were trading lower. Alpha Natural Resources (ANR) was down 5 percent.
Among other stocks making big moves:
— American International Group (AIG) was up 1.9 percent as it prepares to reduce the amount it owes the US government for its federal bailout during the financial crisis. It will sell part of its stake in insurer AIA Group to raise about $6 billion.
— Computer Sciences Corp. (CSC) was up over 2% after it signed a letter with the UK Department of Health to deliver healthcare solutions and services in England.
In Europe, Germany's DAX was down 0.4 percent at 6,893 while the CAC-40 in France was 0.1 percent lower at 3,496. The FTSE 100 index of leading British shares was down 0.1 percent at 5,903.
BP's (BP) share price rose by about 1.1 percent on its USD 7.8 billion oil spill settlement, as investors welcomed the end of the uncertainty.
As well as monitoring developments over Greece's bond swap, investors will be keeping a close watch on a raft of US economic data this week, culminating on Friday's nonfarm payrolls figures.
A marked improvement in US economic data, particularly related to jobs, have helped sentiment in the markets this year. The main US stock indexes are trading at their highest levels since before the collapse of investment bank Lehman Bros. in 2008.
In Asia, Japan's Nikkei 225 index fell 0.8 percent to 9,698.59 and South Korea's Kospi dropped 0.9 percent to 2,016.06. Hong Kong's Hang Seng lost 1.4 percent to 21,265.31. Mainland Chinese shares were mixed, with the Shanghai Composite Index closed down 0.6 percent to 2,445 and the smaller Shenzhen Composite Index marginally higher at 981.20.
Oil prices remain elevated, partly because of tensions over Iran's nuclear ambitions, and have become an increasing drag on stocks over the past couple of weeks. Oil rose 39 cents to USD 107.09 a barrel in New York trading.