US stocks fell on Monday after data showed construction spending dipped in December, offsetting hopes that a US-China trade deal was imminent and pushing the S&P 500 back after its first close above 2,800 points in four months.

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A report over the weekend said US President Donald Trump and his Chinese counterpart Xi Jinping could sign a formal trade pact at a summit around March 27, given progress in talks between the two countries.

The trade-sensitive S&P 500 industrials index was flat, while the other 10 major S&P sectors notched declines.

"The theme the markets are dealing with is what level of slowdown makes sense," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

"The construction numbers reinforce just how the brakes were being slammed on the economy last year."

The Commerce Department reported construction spending fell 0.6 percent in December, further evidence the economy lost momentum at the tail end of 2018.

The technology index dropped 0.49 percent. The biggest hit came as health stocks tumbled 0.94 percent, led by health insurers UnitedHealth and Cigna.

The S&P 500 breached 2,800 twice last week, before finally closing above that mark on Friday for the first time since Nov.8.

"Right above the 2,800 level is a significant amount of resistance. Above this level is free air, above it is a return to the highs," said Antonelli.

At 11:40 a.m. EDT the Dow Jones Industrial Average was down 159.37 points, or 0.61 percent, at 25,866.95, the S&P 500 was down 12.13 points, or 0.43 percent, at 2,791.56 and the Nasdaq Composite was down 35.73 points, or 0.47 percent, at 7,559.63.

The trade optimism and a dovish Federal Reserve has spurred a strong run in stocks. The S&P 500 has surged about 11 percent this year and is now about 5 percent away from its Sept. 20 record closing high.

Among stocks, Kraft Heinz Co gained 2.91 percent after brokerage Morgan Stanley raised its rating on the stock.

Dialysis service provider DaVita Inc slipped 1.9 percent after the Trump administration sought to cut dialysis costs.

Declining issues outnumbered advancers for a 1.32-to-1 ratio on the NYSE and for a 1.54-to-1 ratio on the Nasdaq.

The S&P index recorded 40 new 52-week highs and two new lows, while the Nasdaq recorded 75 new highs and 15 new lows.