A record-breaking rally in stocks paused Monday as investors assessed whether the rise in stock valuations overstated the recent improvement in the economy.
The latest positive data, out Monday, showed that Americans increased spending at retailers last month. That suggests that consumers may boost economic growth in the current quarter ending June 30. Still, the news wasn't enough to lift shares.
"What we have seen is a huge rally, and there aren't any stones unturned at this point," said Alec Young, global equity strategist at S&P Capital IQ. "You reach a point where investors aren't willing to bid things up any more."
Stocks have surged this year, boosted by an improving economy, Federal Reserve stimulus and record corporate earnings. Signs that the housing market is reviving are also supporting stocks. The Dow Jones industrial average and the Standard & Poor's 500 index both closed at record highs Friday.
Monday, the Dow fell 26.81 points to 15,091.68. The S&P 500 index was flat at 1,633.77.
Telecom companies dropped the most of any industry in the S&P 500: 0.83 percent. Health care companies advanced the most, rising 0.7 percent. The Nasdaq composite rose 0.06 percent to 3,438.79. -- AP