Wall Street was set to edge lower on Monday after the best two weeks for the S&P 500 in three months left the index at its highest level in nearly five years, with investors turning their attention to the economy and instability in the Middle East.
Stocks rose for a fourth session on Friday after the Federal Reserve took bold action to spur the economy that could keep equities buoyed in the coming months. The move followed a decision by the European Central Bank to support debt-ridden euro zone nations by purchasing their debt.
"We had a couple of days of pretty strong runs," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "It looks like a little bit of profit taking."
Analysts said the recent unrest in the Middle East could also lead to weakness in the U.S. stock market.
Thousands of protesters took to the streets of the Afghan capital on Monday in the latest of demonstrations that have swept the Muslim world, while Israeli Prime Minister Benjamin Netanyahu warned that Iran would reach the brink of being able to build a nuclear bomb in just six or seven months.
Factory activity in New York state contracted for a second month in a row in September, falling to its lowest level in nearly 3-1/2 years, a report from the New York Federal Reserve showed on Monday. A national ISM manufacturing survey earlier this month showed the sector contracted for a third month in August.
S&P 500 futures fell 2.4 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 23 points, and Nasdaq 100 futures lost 1 points.
"The September blues are about to hit us," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "There are a lot of geo-political concerns heating up and I suspect they could be one of the reasons why we could be set for a temporary pullback."
Major Japanese brandname firms announced factory shutdowns in China on Monday and urged expatriates to stay indoors ahead of what could be more angry protests over a territorial dispute between Asia's two biggest economies.
Activist hedge fund Starboard Value is expected to disclose on Monday that it has taken a 13.3 percent stake in Office Depot Inc , making it the biggest shareholder of the office products supplier, the Wall Street Journal reported, citing people familiar with the matter. The shares rose 10.5 percent in premarket trade.
General Electric Co has hired Morgan Stanley to review its 33 percent stake in Thailand's Bank of Ayudhya Pcl, which could potentially lead to a sale by the U.S. conglomerate of its near $2.2 billion holding, sources familiar with the matter said.
JPMorgan Chase & Co's compliance with U.S. anti-money laundering laws is being reviewed by a banking regulator, a source said, making the largest U.S. bank the latest target of a wide investigation of how banks prevent transactions involving drug money and sanctioned countries. The shares fell 1 percent before the bell.
Industrial and medical conglomerate Danaher Corp said on Monday it will buy diagnostics company IRIS International Inc for $355 million. Iris's shares jumped 44.8 percent in premarket trade.
(Reporting by Edward Krudy; Editing by Chizu Nomiyama)