By Anora Mahmudova, MarketWatch

NEW YORK (MarketWatch) -- U.S. stocks surrendered opening gains and moved lower on Monday as investors assessed disappointing manufacturing data.

The benchmark S&P 500 and the Dow Jones Industrial Average hit record intraday levels but retreated after the release of the economic reports.

U.S. manufacturing companies grew at a somewhat slower pace in May, mainly because new orders and employment expanded more slowly, a survey of executives found.

Earlier, upbeat manufacturing data from China lifted sentiment globally, but enthusiasm was short-lived.

The S&P 500 (SPX) fell 5 points, or 0.3%, to 1,918.13. The Dow Jones Industrial Average (DJI) lost 16 points, or 0.1%, to 16,700.41. The Nasdaq Composite (RIXF) dropped 26 points, or 0.6%, to 4,216.49.

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"After today's disappointing manufacturing reports, investors are worried that we may not see a big pick-up in recovery in the second half of the year," said Chris Gaffney, senior market strategist at EverBank Wealth Management.

"With volatility at low levels, there is a fear among investors and everyone is waiting for that big 'black swan' event," he added.

The Institute for Supply Management said its manufacturing index fell to 53.2% last month from 54.9% in April. That fell short of the 55.8% forecast of economists surveyed by MarketWatch. Readings over 50% indicate more companies are expanding instead of shrinking, however.

Separately, the final Markit reading of U.S. manufacturing conditions in May totaled 56.4, compared to a preliminary reading of 56.2, the privately run firm said Monday. In April the index registered 55.4.

Deal news sends Broadcom, Protective Life soaring

In corporate news, Broadcom Corp. (BRCM) shares surged 8.1% after the company said Monday it hired J.P. Morgan to explore options for its cellular baseband business, including a possible sale or wind-down of the business.

Shares of American Realty Capital Healthcare Trust Inc. (HCT) rallied 8.8% on news that Ventas Inc. (VTR) has agreed to buy the company in a $2.6 billion deal.

Shares of Protective Life Corp. (PL) soared 12% after Dai-ichi Life Insurance Co. said it is considering buying a life insurer, in response to a Wall Street Journal report that it is mulling a $4.87 deal to buy Protective Life.

Shares of Allergan Inc. (AGN) were up 1.6%, after Valeant Pharmaceuticals International Inc. (VRX) late Friday raised its bid again for the Botox maker to $55 billion from $49.4 billion.

Shares of Conn's Inc. (CONN) jumped 6.3% after the retailer beat analysts' first-quarter profit and sales estimates.

Asian, European stocks rise

Asia stocks rose on Monday, with the Nikkei 225 index surging 2.1%. China's latest official PMI index, which rose to a five-month high, helped boost Asian markets. This helped to boost the U.S. dollar back over 102 yen (USDJPY), which in turn benefitted Japanese stocks. Chinese markets on the mainland and in Hong Kong were closed for a holiday.

The strong Chinese data also helped European stocks, with gains for the Stoxx Europe 600 driven by natural-resource firms.

In other markets, gold futures for August (GCQ4) edged up, while crude oil for July delivery (CLN4) pushed lower.

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