Stocks sank after a business group reported that American manufacturing shrank in June for the first time in almost three years. The Dow Jones industrial average dropped 71 points to 12,808.
The government reported a sliver of good news: U.S. construction spending rose in May by 0.9 percent, the most in five months. But that was not enough to soothe investors. The Standard & Poor's 500 was down two points to 1,360.
The Nasdaq composite managed a gain of three points to 2,938.
On Friday, the Dow gained 277 points and the S&P had its best day of the year after European leaders announced a plan to make bailouts easier for troubled banks and relieved governments crippled by debt.
Monday brought a reminder of how badly Europe needs help: Unemployment in the 17 countries that use the euro is at the highest level since the euro was launched in 1999.
France's auditors warned that the country still has a big budget hole to plug, Cyprus prepared for talks on a bailout, and the highest court in Germany announced it would hear arguments from people who want to block the rescue plan.
Investors will also watch this week to see whether the European Central Bank cuts interest rates.
In the U.S., investors will get plenty of economic news.
Car companies report sales Tuesday, retailers like Target and Macy's report monthly sales on Thursday, and a closely watched report on U.S. jobs will be released Friday.
Leo Grohowski, chief investment officer of Bank of New York Mellon's wealth management division, said he hoped for "two steps forward, one step back" improvement in the U.S. economy.
Grohowski expects swings in the market until the November U.S. election, or at least until Europe works out more certain plans about how to free itself from heavy debt.
"So many investors are saying, `Look, I can't go a day without hearing about the ongoing problems in the eurozone,'" Grohowski said, "So that's just taken its toll on (stock) levels."
Elsewhere, China's manufacturing grew at the slowest pace in seven months in June, according to a survey released over the weekend.