Traders also awaited Apple's third-quarter earnings report, due after the closing bell. The iPhone maker's stock fell more than 3 percent Monday after news that supplier Dialog Semiconductor reported preliminary earnings and guidance that missed expectations, according to Street Account.
Read More Apple trouble? Another iPhone supplier disappoints
Ahead of Apple results, drugmakers Pfizer, Merck and Bristol-Myers were among a slew of firms that posted earnings.
Other major reports included:
Comcast — The NBCUniversal parent matched Street estimates with quarterly profit of 80 cents per share, while revenue was above estimates. Comcast added 320,000 high speed internet customers during the quarter, and 156,000 cable customers. (Disclosure: NBCUniversal is the parent of CNBC.) Both classes of the stock ended about 1 percent lower.
DuPont — The chemical giant earned an adjusted 13 cents per share for the third quarter, 3 cents above estimates. Revenue was well short, however, as a strong dollar and other factors impacted the bottom line. DuPont said it was "not pleased" with the quarter's results. The stock still closed up nearly 2.8 percent.
Alibaba — The China-based internet retail giant beat estimates on both the top and bottom lines, with revenue leaping 32 percent. The stock gained more than 4 percent, for its fourth-straight day of gains.
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JetBlue more than halved losses to close down 3.2 percent. The stock initially plunged to lead all Dow transports lower, despite reporting quarterly profit that more than doubled from a year earlier. Passenger revenue per available seat mile, which measures sales relative to the airline's capacity, fell 0.6 percent in the quarter from a year earlier. The firm said it expects October passenger unit revenue to fall 2 percent from a year ago, before recovering later in the year.
The airline also raised its guidance for capacity growth in 2015.
"The material boost in JetBlue's full year capacity growth against the specter of a soft U.S. economy is spooking investors," said Bradd Kern, managing director at Armored Wolf.
UPS closed down 2.9 percent after reporting an increase in earnings but a slight decline in revenue, hurt by the strong U.S. dollar. The firm reiterated its full-year earnings outlook.
Twitter, Gilead Sciences, Shutterfly, Owens-Illinois, Panera Bread, Equity Residential, KKR and TransUnion all are due to report after the close.
In other corporate news, shares of Starwood Hotels closed up 9.1 percent on a Dow Jones report that at least three big Chinese firms are competing to gain government approval to bid for the hotel operator.
Shares of Rite Aid surged 42.6 percent on a Wall Street Journal report that Walgreens Boots Alliance is close to a deal to buy the drugstore chain.
European stocks closed lower, with the DAX and STOXX Europe 600 off more than one percent. Asian stocks were mostly lower, with the Nikkei down nearly 1 percent and mainland Chinese stocks reversed sharp intraday losses to close mildly higher.
"Short-term momentum is waning around the world, supporting a broad-based pullback in the days ahead. We think the pullback will be most pronounced in emerging markets, many of which are right up against resistance on their charts," Katie Stockton, chief technical strategist at BTIG, said in a note.
"In the U.S., we think downside risk is modest, with a higher low likely near support in the 1980-2000 area for the SPX. There is a notable divergence between large-cap stocks and small-/mid-cap stocks that further supports a near-term pullback," she said.
The Dow Jones Industrial Average closed down 41.62 points, or 0.24 percent, at 17,581.43, with IBM leading decliners and DuPont the greatest advancer.
The S&P 500 closed down 5.29 points, or 0.26 percent, at 2,065.89, with energy leading eight sectors lower and health care and consumer staples the only gainers.
The Nasdaq closed down 4.56 points, or 0.09 percent, at 5,030.15.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, held above 15.
About three stocks declined for every advancer on the New York Stock Exchange, with an exchange volume of 995 million and a composite volume of nearly 4.2 billion in the close.
Gold futures ended down 40 cents at $1,165.80 an ounce.
—Reuters and CNBC's Peter Schacknow contributed to this report