Global benchmark indexes fell sharply Monday, weighed by renewed concerns about global economic growth from the weak U.S. ISM report and China manufacturing data. The Shanghai composite plunged nearly 7 percent before triggering a circuit breaker and halting trade for the day.
The Dow Jones industrial average closed down 1.58 percent Monday for its worst percentage performance on the first trading day of a year since 2008. The S&P 500 and Nasdaq composite closed down 1.53 and 2.08 percent, respectively, for their worst start to a year since 2001.
"Yesterday's decline marked a loss of short-term momentum that is a setback for the market, although support levels remain intact for the major indices," BTIG Chief Technical Strategist, Katie Stockton, said in a note. "The SPX has initial support near 1,995 (the equivalent of 1978 for the S&P futures), with secondary and more important support near 1,965. Initial resistance remains just above 2,100, defining the upper boundary of a two-month trading range."
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Shares of Smith & Wesson hit a record intraday high and closed up nearly 11.1 percent at a fresh high, following the release of a more bullish financial outlook and amid President Barack Obama's announcement of gun control measures. Sturm Ruger also hit a record intraday high and held more than 6.5 percent higher.
The Dow Jones industrial average closed up 9.72 points, or 0.06 percent, at 17,158.66, with Wal-Mart leading advancers and Apple the greatest laggard.
The S&P 500 closed up 4.05 points, or 0.20 percent, at 2,016.71, with telecommunications leading seven sectors higher and information technology the greatest decliner.
The Nasdaq composite closed down 11.66 points, or 0.24 percent, at 4,891.43.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 19.
About three stocks advanced for every two decliners on the New York Stock Exchange, with an exchange volume of 863 million and a composite volume of 3.7 billion in the close.
Gold futures for February delivery settled up $3.20 at $1,078.40 an ounce.
—Reuters contributed to this report.