(By Balachander) U.S. stocks closed on a mixed note after a data showed manufacturing activity in the world's largest economy shrank for the third straight month, raising fresh concerns about the economic recovery.
S&P 500 Index shed 0.12 percent to finish at 1,404.94. The Dow Jones Industrial Average dropped 0.42 percent to end at 13,035.94. The Nasdaq Composite Index gained 0.26 percent to close at 3,075.06.
A reading from the Institute for Supply Management showed U.S. factory index declined to 49.6 in August from 49.8 in July, while economists expected a reading of 50.2 percent. Meanwhile, U.S. construction spending unexpectedly fell in July, the Commerce Department reported.
Other closely watched data to be released through the week include: the ADP private sector employment report, weekly jobless claims data, non-farm payrolls and unemployment rate.
In European news, the European Central Bank policy meeting is due on Thursday with investors expecting details of a new bond-buying plan aimed to address the euro zone debt woes. Meanwhile, Moody's rating agency lowered European Union's long-term issuer rating outlook and a data showed U.K.'s construction sector contracted unexpectedly in August.
Hot Stocks Of The Day: AAPL, MRX, VRX, QCOR, NFLX, CLF, MNKD, HEK
In corporate news, Apple Inc. (NASDAQ:AAPL) rose 1.46 percent amid speculation that the Cupertino, California-based technology behemoth could unveil its next-generation iPhone at a product event in San Francisco next week.
Medicis Pharmaceutical Corp. (NYSE:MRX) jumped 38.31 percent after Canadian drugmaker Valeant Pharmaceuticals International Inc. (NYSE:VRX) agreed to buy the U.S.-based company for $2.6 billion or $44.00 per share in cash. The deal represents a premium of 39 percent Medicis' previous closing price. VRX shares surged 14.65 percent.
Questcor Pharmaceuticals Inc. (NASDAQ:QCOR) gained 10.03 percent after the government informed the biopharmaceutical company that its key multiple sclerosis treatment Acthar is eligible for a lower Medicaid rebate amount, which may become 23 percent.
Netflix Inc. (NASDAQ:NFLX) shed 6.35 percent after Amazon.com Inc. (NASDAQ:AMZN) announced a multi-year licensing agreement with pay-television channel Epix for Prime Instant Video. The agreement comes just days after the expiry of Netflix's deal with Epix.
Cliffs Natural Resources Inc. (NYSE:CLF) agreed to a short-term extension of its labor contract with the United Steelworkers (USW) since both parties have not reached a new agreement. Shares closed 6.03 percent lower.
Heckmann Corp. (NYSE:HEK) spiked 37.92 percent after the water services company announced it is acquiring privately held Power Fuels for about $381 million to boost its presence in the fracking market.
MannKind Corp. (NASDAQ:MNKD) retreated 6.30 percent after development-stage biopharmaceutical company filed plans to offer up to $500 million in common and preferred stock, warrants, and debt securities.
Finisar (NASDAQ:FNSR) and Pep Boys (NYSE:PBY) are scheduled to post their quarterly numbers after the markets close.
Campbell Soup Co. (NYSE:CPB) posted stronger-than-forecast quarterly results on strong soup sales and the company issued earnings forecast for 2013 above consensus. Shares closed slightly lower.
European markets ended sharply lower, with Germany's DAX falling 1.17 percent to close at 6,932.58. France's CAC40 tumbled 1.58 percent to finish at 3,399.04. U.K.'s FTSE 100 retreated 1.50 percent to end at 5,672.01.
Among Asian markets, China's Shanghai Stock Exchange Composite Index dropped 0.75 percent to finish at 2,043.65. Japan's Nikkei 225 declined 0.10 percent to end at 8,775.51. Hong Kong's Hang Seng Index declined 0.66 percent to end at 19,429.91. India's BSE Sensex closed at 17,440.87, up 0.32 percent.
Commodity & Currency Scan:
Crude oil futures declined 1.15 percent to $95.360 per barrel while natural gas futures added 1.75 percent to $2.848 per million metric British thermal units. Gold futures rose 0.68 percent to $1,699.0 per ounce and silver futures soared 3.00 percent to $32.11 per ounce.
In the currency market, the euro slipped 0.23 percent against the U.S. dollar to 1.2564. The British pound dipped 0.07 percent against the greenback to 1.5875, while the dollar added 0.23 percent against the Japanese yen to 78.4400.