NEW YORK (AP) -- Stocks fell in light trading Monday as investors dumped former darlings of the market, real estate companies and utilities.
Indexes slumped from the start of trading and remained down throughout the day as investors continue to speculate about when the Federal Reserve is likely to raise interest rates as the economy strengthens. A report earlier in the day showed U.S. manufacturing picking up.
The selling was modest, but broad. Eight of the 11 sectors of the Standard and Poor's 500 index closed down for the day.
The Dow Jones industrial average fell 54.30 points, or 0.3 percent, to 18,253.85. The S&P 500 index lost 7.07 points, or 0.3 percent, to 2,161.20. The Nasdaq composite declined 11.13 points, or 0.2 percent, to 5,300.87.
Investors hungry for income-producing assets have been buying utilities and real estate companies for their steady dividends. But those stocks become less attractive if interest rates and bond yields climb.
On Monday, stocks of real estate companies lost 1.8 percent. Utilities shed 1.4 percent.
In an election year when both candidates for U.S. president are talking tough about trade, renewed fears over Britain's exit from the European Union may have also added to the jitters, said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
British Prime Minister Theresa May said that the formal process by which Britain leaves the European Union, dubbed "Brexit," will start by March. That sent the British pound down sharply. May signaled that she would prioritize controls on immigration over access to the European single market.
"There was a hope in the market that Brexit didn't mean Brexit," said Haworth. But now, "we have a timetable."
Bucking the downward trend in the market were some stocks involved in the latest of a string of deal-making.
Janus Capital surged $1.69, or 12 percent, to $15.70 after announcing it would merge with a London-based investment company, Henderson Group.
Outdoor gear retailer Cabela's shot up $8.25, or 15 percent, to $63.18 on news it is being bought by Bass Pro Shops for $4.5 billion.
Ernie Cecilia, chief investment officer at Bryn Mawr Trust, said companies are making deals because they have few other ways of lifting sales in a slow growth, low inflation world.
"If you can't raise prices," Cecilia said, "how else are you going to grow?"
The price of oil continued its climb from last week, which normally would help drillers and other energy companies. Benchmark U.S. crude oil rose 57 cents to close at $48.81 a barrel.
In the end, though, even energy companies fell, losing 0.2 percent.
Among stocks making big moves, Merrimack Pharmaceuticals slumped 31 cents, or 5 percent, to $6.04. The cancer drug developer announced that it would cut almost a quarter of its workforce and look for a new CEO.
Federal Realty Investment trust lost $5.85, or nearly 4 percent, to $148.08, one of the biggest declines in the S&P 500.
A number of economic reports are due out this week, culminating Friday with the government's monthly jobs survey. Strong jobs numbers might encourage Federal Reserve to raise interest rates this year.
In energy trading, Brent crude, the international standard, rose 70 cents to close at $50.89 a barrel in London. Wholesale gasoline edged up 1 cent to $1.47 a gallon, heating oil rose 1 cent to $1.55 a gallon and natural gas increased 2 cents to $2.923 per 1,000 cubic feet.
Bond prices fell. The yield on the 10-year Treasury note rose to 1.62 percent from 1.60 percent. The euro fell to $1.1217 from $1.1237 and the dollar rose to 101.55 yen from 101.41 yen.
Precious and industrial metals prices closed lower. Gold fell $4.40 to $1,312.70 an ounce, silver lost 35 cents to $18.87 an ounce and copper slipped 2 cents to $2.19 a pound.