Stocks ended lower Monday as investors looked at some weak economic data and worried about third-quarter corporate profits.
Technology stocks, which have performed ahead of the market this year, were among the hardest hit.
Bond yields fell as the downbeat economic news revived hopes that the Federal Reserve Board will lower interest rates soon.
The Dow Jones industrial average fell 27.82 points to 4,761.26.
Declining issues outnumbered advances by about 13 to 9 on the New York Stock Exchange. Big Board volume came to 304.99 million shares, down from 335.25 million on Friday.
Stocks started the session down and maintained that course as successive economic reports showed weakness in the economy. The Commerce Department said Americans' personal income was unchanged in August, the weakest showing in three months. Although spending climbed a larger-than-expected 1%, much of that increase was attributed to purchases of cars as dealers offered discounts to pare inventories. The department also said construction spending fell 0.2% in August, also the weakest showing in three months.
The National Assn. of Purchasing Management said its closely watched index of manufacturing growth rose to 48.3% from 46.9% in August. An index reading below 50% indicates a decline in activity at the nation's factories.
"The data indicates the economy is all right but that there will be a period of much slower growth than anticipated," said Michael Metz, investment strategist at Oppenheimer & Co. in New York. That concern about economic growth translated into concern about corporate profits, Metz said.
As for technology stocks, they are up by 42% for the year, significantly above the 26.9% registered for the entire market, according to Hugh Johnson, chief investment officer at First Albany Corp. For the third quarter, however, they were up only 8.6%.
Among Monday's highlights:
* Micron Technology lost 2 1/4 to 77 1/8, and Microsoft lost 1 3/8 to 89 1/8.
The Nasdaq Stock Market, where most technology issues are concentrated, tumbled 15.97 points, or about 1.5%, to 1,027.57.
"Investors with weak knees are bowing out of technology stocks," said Don R. Hays, director of investment strategy at Wheat First Securities in Richmond, Va.
* Among actively traded NYSE issues, Merck rose 7/8 to 56 7/8 after the company said the Food and Drug Administration gave it the green light to market its non-hormonal Fosamax drug for treatment of osteoporosis.
* In active Nasdaq trading, Apria Healthcare Group fell 3 at 21 3/4 after Smith Barney cut its rating on the stock.
Among other broad market indicators, the NYSE composite index fell 1.18 points to 312.08; the Standard & Poor's 500-stock index fell 2.69 points to 581.72, and at the American Stock Exchange, the market value index lost 4.12 points to 540.60.
The yield of the benchmark 30-year Treasury bond fell to 6.47% from 6.50% late Friday.
The dollar rose against the Japanese yen as traders expected the Group of Seven leading industrial nations to signal support for a stronger dollar when they meet Saturday. In late New York trading, the dollar ended at 100.35 Japanese yen, up from 99.73 yen on Friday.
In commodities trading, oil and natural gas prices rose as the expected arrival of Hurricane Opal along the refinery-crowded Gulf Coast forced the temporary shut-off of large volumes of oil and gas production. November natural gas soared 14.4 cents to $1.894 per million British Thermal Units at the New York Mercantile Exchange, the highest price for a spot contract since Dec. 12.
Overseas, London's FTSE-100 index closed 12 points higher at 3,520.2. In Tokyo, the Nikkei 225-share average ended 173.22 points lower at 17,739.84.