BAR LOWERED: "The market is growing more pessimistic around growth in China," said David Chalupnik, head of equities for Nuveen Asset Management. "Expectations have been coming down, but the numbers have been disappointing even those reduced expectations."
JAPAN TOO: Meanwhile, Japan, the world's third-largest economy, reported a record current account deficit for January and lowered its economic growth estimate for the October-December quarter to 0.7 percent from 1 percent.
IN THE RED: The downbeat economic report from China was hurting several industry sectors heavily reliant on Chinese economic growth, in particular: materials, energy and industrials. Nine of the 10 sectors of the S&P 500 index were down. Mining company Cliffs Natural Resources was the biggest decliner among S&P 500 companies, shedding 80 cents, or 4.3 percent to $17.84.
ANOTHER STRONG WEEK? Despite the disappointing data from China, some market watchers anticipate that last week's gains will continue. The S&P 500 index notched record highs three times last week as investors grew more confident that weak U.S. economic data in recent weeks were a reflection of unusually severe winter weather, not a broad economic slowdown. Better-than-expected payroll numbers last week also helped encourage investors.
"In general, I think the market will move past the poor China export numbers fairly quickly," said James Liu, global market strategist at J.P. Morgan Funds. "There's still a lot of fundamental support for the S&P at this particular range."
Chalupnik also anticipates Monday's decline will be short-lived, barring more fallout from Russia's incursion into Ukraine. "My guess is the market moves ever so slightly higher this week," he said. "The trend is still up. We really haven't seen anything to break that trend."
EYE ON CONSUMERS: This is a light week for market-moving economic data and corporate earnings. But investors will be watching the latest data on retail sales, due out Thursday, and a new gauge of consumer confidence, due out Friday.
"Those two sets of numbers will really tell us where the consumer is and whether or not the consumer will head out and spend when the weather warms up," Liu said.
BIG RISER: Alexion Pharmaceuticals climbed the most of any stock in the S&P 500 index, vaulting $10.97, or 6.5 percent, to $179. The company raised its 2014 earnings forecast, saying the national health agency of France will reimburse it for past sales of its drug Soliris.
TOP BANANA: Chiquita agreed to combine with Dublin-based Fyffes to become the world's top banana company. The stock-for-stock transaction announced Monday creates a global banana and fresh produce company with $4.6 billion in annual revenues. Chiquita rose $1.19, or 11 percent, to $12.03.
SEPARATE WAYS: Chemical company FMC plans to separate into two publicly traded companies. The "New FMC" will include the agricultural and health and nutrition businesses, while "FMC Minerals" will include the current minerals segment that houses the alkali chemicals and lithium businesses. FMC rose $4.33, or 5.6 percent, to $82.20.
FROZEN ARCHES: McDonald's slipped 36 cents to $95.14. The company said that a key sales metric dropped 1.4 percent in the U.S. last month, which McDonald's attributed to severe winter weather. The world's largest hamburger chain was also hindered by difficult winter weather conditions in January.
FLYING HIGHER: Southwest Airlines said passengers are flying more miles, a trend that helped boost a key revenue figure last month. Revenue for every seat flown one mile grew 5 percent last month from a year earlier. Southwest's stock rose 39 cents, or 1.7 percent, to $23.49. It touched a 52-week high of $23.67 earlier. The stock has nearly doubled in the last 12 months.
BOND WATCH: The yield on the 10-year Treasury note slipped to 2.78 percent from 2.79 percent as investors moved money into bonds. The yield, which affects rates on mortgages and other consumer loans, has been rising steadily this month from a low of 2.60 percent on March 3.
HAPPY ANNIVERSARY: Monday marks the fifth anniversary of the current bull market in stocks. The S&P 500 index bottomed out on March 9, 2009, and is up about 177 percent since then. The run-up over the past five years has been helped by stimulus from the Federal Reserve, record corporate profits, the economic recovery and companies repurchasing their own stock.