As US Federal Reserve policy makers began their two-day meeting a report showed a surprise contraction in the country's business activity in April, further weakening the greenback amid expectations for ongoing monetary stimulus.
The MNI Chicago Report's business barometer fell to 49, dropping below 50 for the first time since September 2009, from 52.4 in March.
Offsetting that disappointing data was the latest report on US home prices. Single-family home prices jumped 9.3 per cent in February from a year earlier, according to the S&P/Case Shiller index of 20 metropolitan areas.
The US dollar weakened 0.4 per cent against the euro, bringing its drop for the month of April to 2.5 per cent.
The central bank will probably continue its "aggressive" easing program this year, former Fed governor Kevin Warsh told Bloomberg in an interview on Monday at the Milken Institute Global Conference in Los Angeles.
In afternoon trading in New York, the Standard & Poor's 500 Index eked out a 0.11 per cent advance, while the Nasdaq Composite Index rose 0.51 per cent. The Dow Jones Industrial Average was last down 0.01 per cent.
Shares of Apple rose, last up 2.9 per cent to US$442.67, as the company prepared for a US$17-billion bond offering that drew more than US$50 billion of orders by midday in New York.
"Apple made its intentions clear that this deal is for shareholder-friendly activity, but they have tremendous metrics and brand recognition," Rajeev Sharma, portfolio manager at First Investors Management, told Reuters. "Apple is something everyone wants in their portfolio."
In Europe, the Stoxx 600 Index ended the day 0.2 per cent lower from the previous close. The index posted a gain of 1 per cent in April. France's CAC 40 shed 0.3 per cent, while the UK's FTSE 100 fell 0.4 per cent. Germany's DAX increased 0.5 per cent.
The latest economic data from Europe bolstered the case for the European Central Bank to cut rates when policy makers meet on Thursday. The euro-zone unemployment rate climbed to a record 12.1 per cent in March, while the region's annual inflation rate dropped to 1.2 per cent in April, the lowest since February 2010.
"If it weren't for the ECB's usual reluctance to make large changes, there would be a strong case to cut by 50 basis points, and I think the likelihood is perhaps higher than the market expects," Frederik Ducrozet, an economist at Credit Agricole, told Bloomberg. "It's probably around 20 per cent, because with inflation that low it's really the best time to do such things and maximise the impact on the market."
As expected, Slovenia was downgraded by Moody's. The country's new government is expected to unveil a reform plan next week.