US stocks drop on weak manufacturing data

NEW YORK (AFP) - United States (US) stocks retreated on Monday, weakened by mediocre manufacturing data and cautious sentiment after last week's record highs.

The Dow Jones Industrial Average dropped 5.69 points (0.04 per cent) to 14,572.85.

The broad-based S&P 500 gave up 7.02 (0.45 per cent) at 1,562.17, while the tech-rich Nasdaq Composite Index sank 28.35 (0.87 per cent) to 3,239.17.

The losses, which came after the three-day Easter holiday weekend, followed Friday's record closing highs on the Dow and the S&P 500.

The Institute for Supply Management said its manufacturing sector activity index came in at 51.3 in March, below the 54.0 per cent expected by analysts.

Mr Michael James, managing director of equity trading at Wedbush Morgan Securities, said the market was poised for a pause after the record highs.

"It's a little bit of a pullback in an upward trend," Mr James said.

Apple dropped 3.1 per cent, dragging down the Nasdaq. Apple chief executive Tim Cook reportedly apologised to Chinese customers in a letter for poor customer service following recent criticism in the Chinese media.

Health insurers gained amid speculation that Medicare payment rates could be advantageous. Humana jumped 8.6 per cent, UnitedHealth rose 3.1 per cent and Aetna rose 2.4 per cent.

Electric car manufacturer Tesla Motors jumped 15.9 per cent after announcing that it was boosting its profit forecasts due to stronger-than-expected vehicle sales.

Fresh egg giant Cal-Maine Foods added 0.4 per cent after reporting solid fiscal third-quarter earnings and warning of higher feed costs.

Greeting-card manufacturer American Greetings shot up 12.1 per cent after announcing a plan to be acquired in an US$878 million (S$1.1 billion) deal.

Onyx Pharmaceuticals added 0.4 per cent after announcing that it would present new clinical research at the International Myeloma Workshop in Kyoto, Japan.

The yield on the 10-year Treasury dropped to 1.84 per cent from 1.85 per cent late Thursday, while the 30-year yield was unchanged at 3.09 per cent. Bond prices move inversely to yields.