The Dow Jones industrial average finished 23.17 points lower at 8,574.85 despite overcoming an early 54-point drop and gaining as much as 37 points during the afternoon.
Most popular indexes also suffered minor losses, with a fairly solid showing by the blue-chips masking a weak day for smaller-company shares.
The Dow, which had gained 110 points in the prior three sessions after tumbling 299 points in Tuesday's selloff, now sits more than 750 points from the record of 9,337.97 set less than a month ago on July 17.
The market opened weak Monday after a sixth-straight losing session in Japan, where stocks fell 1.3 percent amid news of another major corporate failure and signs of political bickering that could delay economic stimulus measures.
There were no major reports released Monday to further elaborate on the recent slowdown in the U.S. economy, which continues to be hurt by the fiscal turmoil in Asia.
"Looking at the buildup in inventories this year and the outright sluggishness in the manufacturing economy, the force that is continuing to sustain the overall economy is the insatiable American consumer whose confidence remains high," said A.C. Moore, chief investment strategist at Dunvegan Associates Inc. "We suggest, however, that consumer confidence is based on the meteoric rise in the stock market.
"Should the market crack owing to an ebbing of foreign buying, as now seems the case, so will consumer confidence, and so will the domestic economy."
With little of fundamental import on the domestic front Monday, investors assessed the outlook for Japan's economic recovery, as well as the possibility that China may devalue its currency, the yuan.
Last week, Japan's new prime minister, Keizo Obuchi, delivered his first major speech since being elected.
His address failed to impress the financial markets, however, who had hoped Obuchi would discuss novel initiatives to resuscitate his country's decimated economy.
"Prime Minister Obuchi's first policy speech lacked the punch on economic policy people were hoping for," said Carl Weinberg, chief economist at High Frequency Economics Ltd. "We are now in a period where no one outside of the Obuchi government believes the economic problems are being resolved, or even addressed.
"We have to expect the U.S. dollar to continue to appreciate against the yen."
The yen stood close to its eight-year low of 146.73 vs. the U.S. dollar. A weaker yen makes Japanese goods and services more competitive vs. those of other nations and ups the pressure on other Asian nations to devalue their own currencies.
As for China, its economic growth is decelerating, with industrial production slipping by about one-third from that of last year and retail sales diving by about 50 percent. Any devaluation of he Chinese yuan is seen as having dire consequences for Asia.
Such a move could ignite a round of currency devaluations in other Asian nations, which would further strengthen the U.S. dollar and hamper the ability of American corporations to offer competitively priced goods and services.
In Monday's market highlights:
- The Standard & Poor's 500 Index fell 0.6 percent.
- New York Stock Exchange losers beat winners by 2 to 1. New 52-week highs totaled 21, while 189 stocks made new 52-week lows.
- On the Big Board floor, turnover receded 24 percent to 577 million shares.
- The Nasdaq Composite declined 0.4 percent. Declining issues trailed advancers by 4 to 3 in the Nasdaq Stock Market. Volume totaled 546 million shares.
- The Russell 2000 Index of small-capitalization stocks fell 1.0 percent.
- The 30-year Treasury advanced 5/32, to yield 5.621 percent.