The Dow Jones industrial average slipped 34 points to 13,193 as of 11:15 a.m. The Standard & Poor's 500 index fell seven points to 1,396 and the Nasdaq composite fell 18 points to 3,051.
Stocks were also being held back by a sharp drop in an index of Midwestern manufacturing and a slowdown in consumer spending last month. That added to worries that the U.S. economy recovery is slowing down.
The losses were broad. Nine of the ten industry groups in the S&P 500 fell, led by materials. Only health care stocks rose. The dollar and U.S. Treasury prices rose as investors parked money in low-risk assets.
The stock market is coming off its best week in a month. The S&P 500 rise 1.5 percent last week and is still up 11 percent this year. If the S&P finishes lower Monday it will be the first loss after four days of gains.
On the last day of trading for April, the S&P 500 index is down nearly 1 percent for the month, putting it on track for its first losing month since September.
European markets were mainly lower over growing concerns about Spain. Stocks were off nearly 1.4 percent in Spain and France and 1.1 percent in Italy.
The Spanish government said that country's economy shrank 0.3 percent in the first three months of the year, the second straight three-month period of contraction. It's the second time in three years that Spain has been in a recession.
Ratings agency Standard & Poor's downgraded Spain's government debt to just three notches above junk Friday. On Monday S&P lowered its rating for 11 Spanish banks, which are loaded with bad debt from a collapsed housing market. Spain is the fourth-largest economy among the 17 countries that use the euro. Investors worry that Europe's bailout funds won't be big enough to rescue Spain if it needs help.
Stocks to watch include Barnes & Noble, which is teaming up with Microsoft to create a unit to house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said they may separate those businesses entirely. That could mean a stock offering, sale, or some other kind of deal.
Barnes & Noble jumped 64 percent to $22.42. Microsoft was flat.
Health insurer Humana fell 7 percent to $81.61 after reporting a 21 percent drop in first-quarter profit as the company paid out more in claims, falling short of Wall Street expectations.
NYSE Euronext, owner of the New York Stock Exchange, fell 5 percent to $25.65 after reporting that its income plunged 44 percent in the first three months of the year. Trading business was weak and the company had to abandon a merger deal with the European exchange operator Deutsche Boerse.
Sunoco jumped 20 percent to $48.90, the most of any stock in the S&P 500, on news that the fuel refining and marketing company agreed to be bought by Energy Transfer Partners, a natural gas pipeline company, for $5.3 billion.