U.S. stocks closed lower on Monday, the first trading day of the fourth quarter, as investors digested key economic news and kept an eye on oil prices.
"I think the market is still looking for inspiration. Non of the news we've gotten have been terribly encouraging," said Bruce McCain, chief investment strategist at Key Private Bank. "Some sort of corrective action, given the [high] valuations wouldn't be surprising and would be healthy for the market."
"The auto sales data were not great," said Chuck Self, CIO at iSectors. "The manufacturing data were not great, either. They're higher, but not running away. I think a lot of this has to do with rally we had Friday."
The S&P 500 fell 0.3 percent, with real estate falling 1.8 percent to lead decliners.
"Things seem to be quiet at the moment. October is usually a rough month for stocks. i guess we're getting a bit of a kickback from Friday, said Randy Warren, chief investment officer at Warren Financial Service.
The Nasdaq composite slid 0.21 percent.
"For me, it could be the return of overbought conditions on Friday. We had a pretty strong session on Friday and that supports a pullback today," said Katie Stockton, chief technical strategist at BTIG. She added, however, that overall short-term momentum remains strong, and that the S&P could break above its all-time intraday high of 2,193.81.
"It's a minor level because it hasn't been tested that much. Technical levels are stronger the more you test them," Stockton said. Stocks ended the third quarter on a high note on Friday, rising around 1 percent.