Wall Street falls

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WallStreet1234 REUTERS The US bourse is set to open higher as European leaders get ready to meet.

New York - US stocks fell on Monday as weak data on the housing market and services sector were the latest indications of worsening economic conditions, taking the S&P 500 below a key support level.

While acquisition activity limited the market's decline, keeping indexes near record levels, investors found few reasons to buy as the data followed some high-profile disappointments in corporate earnings, including from Amazon.com and Caterpillar last week.

Pending home sales unexpectedly fell 1.1 percent in June.

The report follows a drop of 8.1 percent in June new home sales, the biggest slump in almost a year.

The PHLX housing sector index fell 1.6 percent.

D.R. Horton Inc fell 1.7 percent to $21.24.

Activity in the US services sector was at its most brisk in 4-1/2 years in July, though readings for new business and employment growth weakened, according to financial data firm Markit's preliminary data.

“This isn't the first soft data point we've gotten on housing recently, which suggests the sector is decelerating, a real discouragement,” said Liam Dalton, president of Axiom Capital Management Inc in New York.

“The data suggests it is time to be cautious over the idea of a robust economy.”

Later this week will see the release of data on second-quarter gross domestic product, as well as the July payroll report.

The Dow Jones industrial average fell 65.63 points or 0.39 percent, to 16,894.94, the S&P 500 lost 9.24 points or 0.47 percent, to 1,969.1 and the Nasdaq Composite dropped 31.14 points or 0.7 percent, to 4,418.42.

With the day's move, the S&P 500 fell below its 14-day moving average, a level that had served as support on Friday.

The benchmark index remains about 1 percent away from an all-time record reached last week.

In the latest deal news, Dollar Tree offered to buy Family Dollar Stores Inc for about $9.2 billion while Zillow agreed to buy Trulia Inc for $3.5 billion in stock.

Family Dollar jumped 22 percent to $77.73 as the S&P's biggest percentage gainer while Dollar Tree was up 2.8 percent to $55.72.

Trulia jumped 8 percent to $60.86 while Zillow fell 6.7 percent to $148.26.

Cummins raised its full-year revenue outlook, citing improved North American demand; still, shares fell 3 percent to $145.69.

Cisco Systems Inc dipped 1 percent to $25.7.3 a day after Pacific Crest downgraded the stock to “sector perform” from “outperform.”

El Pollo Loco Holdings, a restaurant chain that went public on Friday, extended the rally of its trading debut, jumping 20 percent to $28.81. - Reuters

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