U.S. stocks closed slightly lower on Monday, with the S&P 500 extending 2014 losses into a third session, as mixed economic data put investors in a cautious mode ahead of the jobs report at the end of the week.
"The precursor to the main event this week is the FOMC (Federal Open Market Committee) minutes on Wednesday, then all eyes on the payrolls number," said Bill Stone, chief investment strategist at PNC Asset Management Group, referring to the nonfarm payrolls figure for December, set for release on Friday.
The Institute for Supply Management's non-manufacturing index came in at 53.0 in December, versus estimates that the index would climb to 54.6 from 53.9 the month before.
While under forecasts, the index still came in "well above the 50-line of demarcation," said Stone of the level that separates expansion from contraction. The services report was also offset by "better-than-expected factory orders, which is the real deal, although more dated," said Stone, referring to separate data from the Commerce Department, which reported new orders for U.S. factory goods rebounded in November, increasing 1.8 percent.
Economic reports released ahead of the open showed service industry growth slowed in China in December but gained momentum across most of Europe.
"The Chinese number didn't help us; Europe is healing but still on the edge," said Stone of the economic data from overseas.
Shares of JetBlue Airways fell more than 4 percent after the airline said it would temporarily halt service in Boston and at the three New York regional airports as it contends with weather-related disruptions. Whole Foods Market declined after Longbow Research said the company's profit margin could decline as it hikes discounts to compete with rivals.
Men's Wearhouse hiked its offer for Jos. A. Bank Clothiers, days after the smaller rival increased its buyout defenses. Boston Scientific climbed after Morgan Stanley recommended the drug manufacturer's shares. Shares of Walgreen rose after the drugstore chain reported increased sales in December. Twitter fell after Morgan Stanley reduced its rating on the social-networking company to underweight from hold.