The Dow Jones industrial average lost about 6.93 points to close at 6,806.16, having recovered from a 46-point slide during the morning. Last week, the Dow added about 116 points, giving the blue-chip barometer a surprising gain of nearly 365 points, or about 5.7 percent, for January.
Advancers decliners by an 11-to-9 margin on the New York Stock Exchange, with 1,400 up, 1,138 down and 789 unchanged.
NYSE volume totaled 463.58 million shares vs. 574.50 million Friday.
The Standard & Poor's 500-stock list rose 0.54 to 786.70, skipping past Jan. 22's record close at 786.23. The NYSE's composite index rose 0.50 to 412.48, just 0.32 shy of a new high, and the American Stock Exchange composite index rose 0.94 to 589.71. But the Nasdaq composite index fell 3.81 to 1,376.04.
Trading was rather sluggish even though the Treasury market rallied after the National Association of Purchasing Management reported that the nation's manufacturing economy contracted in January following months of surprising strength.
As bond prices rose, the yield on the 30-year Treasury bond - a key determinant of corporate and consumer borrowing costs - fell as low as 6.73 percent, down from 6.78 percent late Friday. By late afternoon, the yield stood at about 6.74 percent.
The NAPM report, one of the earliest readings on January's economic activity, comes a day before a Federal Reserve meeting on whether the central bank needs to raise interest rates to slow the economy as protection against inflation.
Over the past month, a series of surprisingly robust economic readings eroded hopes that economic growth had stayed modest enough to keep a lid on inflationary pressures such as rising production costs. Still, most recent inflation readings have been tame.