"I think there is concern about overall economic growth, and there is still a lot of concern about financials," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
The Institute for Supply Management reported its index of business activity dropped to 50.8 in November from 50.9 in October, with a reading above 50 illustrating expansion, and an under-50 count pointing to a contraction.
"The 50 reading is great, but it's not enough; directionally we're slowing," said Fitzpatrick.
The Dow Jones Industrial Average was down 34.1 points in early trading to 13,337.3, with 19 of its 30 components trading lower.
The S&P 500 fell 7.01 points to 1,474.13, while the Nasdaq Composite declined 7.49 points to 2,53.47.
In early action on the New York Mercantile Exchange, crude-oil futures fell 87 cents to $87.84, while gold gained $2.6 to $791.7 an ounce.
Ahead of the opening bell, Boston Federal Reserve President Eric Rosengren said in a morning speech that the foreclosure crisis in subprime mortgages will get worse before it gets better.
Rosengren's talk comes ahead of Tuesday's Fed blackout before the Dec. 11 meeting, at which the central bank is slated to make a decision on whether to cut interest rates for a third time this year.
U.S. stocks gained last week, helped by comments from Federal Reserve officials that hinted at interest-rate cuts as well as $7.5 billion injection into Citigroup Inc., with the Dow tallying its third-best week this year.
Activision Inc. jumped 17.3% after being snapped up by France's Vivendi SA in a deal to create the biggest video-games maker.
Citigroup was back in the spotlight, saying late Friday it reduced the assets of structured investment vehicles it sponsors to $66 billion from $83 billion, while Moody's Investors Services said it may downgrade the ratings of some of the Citi SIVs.
A report in The Wall Street Journal said Citadel's deal with E-Trade gives a floor to valuations of collateralized debt obligations held by Citigroup, Merrill Lynch and other banks of 27 cents on the dollar. E-Trade was downgraded to sell from neutral at Banc of America Securities.
Starting at roughly 11 a.m. Eastern, automakers will report November light vehicle sales in the U.S., which may have declined since October and flattened compared to a year ago. Chrysler LLC may report the biggest slide of the Big Three, according to Edmunds.Com.
International stock markets struggled for direction. The Nikkei 225 ended with a loss of 0.3%, and the FTSE 100 was down 0.4% in late London trade.
By Kate Gibson