Stocks fell on Monday as investors worried about higher oil prices and warnings of lower company earnings and delayed decisions before Tuesday's meeting of the Federal Reserve on interest rates.
In moderate trading, consumer goods stocks suffered as Colgate-Palmolive Co fell 10.6 percent - its largest one-day loss in four years.
Colgate, which makes toothpaste and other personal products, fell $5.76 to $48.57 after it warned that earnings for the second half of the year will fall short of earlier forecasts due to higher marketing costs.
Procter & Gamble Co fell more than 3 percent following a profit warning from its European rival, Unilever. P&G shares were down $1.96 at $54.30.
Investors were reluctant to make new investments before the Fed meeting, at which Chairman Alan Greenspan and the others members of the Federal Open Market Committee are expected to raise the benchmark fed funds rate 25 basis points to 1.75 percent.
More important for the market will be what the Fed signals on future rate policy since recent, weaker data has raised doubts over the strength of the US economy.
The Dow Jones industrial average was down 63.71 points, or 0.62 percent, at 10,220.75. The Standard & Poor's 500 Index was down 4.75 points, or 0.42 percent, at 1,123.80. The technology-laced Nasdaq Composite Index was down 1.01 points, or 0.05 percent, at 1,909.08.
"Everyone seems to be feeling Greenspan is going to move up 25 basis points," said Tim Heekin, director of trading at San Francisco investment bank Thomas Weisel Partners.
"It just seems that people are waiting to see that - as well as listen to the rhetoric behind the move."
A Wall Street downgrade for Citigroup Inc sent its shares down 2.8 percent to $45.61. Brokerage Merrill Lynch & Co downgraded the company to "neutral" from "buy."
Shares of Altria Group Inc, the parent of cigarette maker Philip Morris USA, also helped drag the Dow industrials lower as a $280 billion racketeering trial of major cigarette makers gets under way this week. Altria fell almost 3 percent to $45.61
Pfizer Inc was down about 2.5 percent after Morgan Stanley cut its rating on the world's biggest drugmaker to "equal weight" from "overweight," saying Pfizer's ability to outperform earnings of other drug makers is "waning."
The American Stock Exchange Pharmaceuticals Index - comprised of large US and European drug makers - was down 1.34 percent to 318.58.
Buying of semiconductor shares helped limit losses on Nasdaq. Intel Corp rose 2 percent to $21.06 and other semiconductors were higher after a Wall Street firm took a more favourable view of the group.
Sanford Bernstein on Monday gave the semiconductor sector an "overweight" rating and said it has a positive bias toward the group heading into the October earnings season.
Oil prices hit $46 a barrel on Monday after Russia's YUKOS suspended some oil exports to China and storm-related disruptions threatened to reduce US oil inventories.
High oil prices generally have a dampening impact on stocks because they put pressure on corporate profit margins and erode consumer wealth.