It was a reversal from the initial positive reaction to the news that Osama bin Laden had been killed by U.S. forces. Traders and investors said it will take more to sustain a longer rally.
The Dow Jones industrial average (INDU) fell 3 points, or less than 0.1%, to 12,807. The Dow had been up as much as 60 points earlier in the day.
The S&P 500 (SPX) fell 2.4 points, or 0.2%, to 1,361; and the Nasdaq Composite (COMP) lost 9 points, or 0.3%, to 2,864.
"Once the bin Laden news settles and earnings season slows down, we'll be due for a pullback," said Fred Dickson, chief market strategist with D.A. Davidson & Co. "Bin Laden's death doesn't eliminate the risk factors and it doesn't settle the political uprising issues in the Mideast."
Stocks have headed higher since the beginning of the year amid strong earnings. Despite jitters about the economy and concerns about inflation, April was the best month for the three indexes since December.
Corporate earnings have largely come in above expectations, but last week's weak GDP reading and higher-than-forecast jobless claims show there's still cause for concern about the U.S. economic recovery.
U.S. investors will get the April jobs report, a closely watched gauge of U.S. economic activity, this upcoming Friday.
Oil prices edged lower with June oil futures falling 0.4% to $113.52 a barrel.
Gold prices also backed off their highs Monday. Gold futures for June delivery fell $9.50 to $1,547.00 an ounce, after hitting an intraday high of $1,577.40 an ounce.
In currencies, the dollar fell against the euro, but gained strength against the Japanese yen and the British pound.
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