Gold and oil futures hit new highs as greenback slides

NEW YORK (MarketWatch) -- U.S. stocks on Monday fell ahead of manufacturing data likely to show industrial activity on the wane and as the dollar index declined to its lowest level since its inception in 1973.

The Dow Jones Industrial Average ($INDU) fell 79.05 points to 12,187.34, with 20 of its 30 components trading lower.

The S&P 500 ($SPX) declined 8.57 points to 1,322.06, while the Nasdaq Composite (COMP) shed 15.51 points to 2,255.97.

Shares of E-Trade Financial Corp. (ETFC) gained 2% on speculation the beleaguered online brokerage may be positioning itself for a potential sale. Read full story.

Diebold Inc. (DBD) shares jumped 61% on news United Technologies Corp. (UTX) had offered to buy the maker of ATM and voting machines.

Shares of United Technologies slid more than 3%.

Gold and crude-oil futures surged to new record highs, propelled by sharp weakness in the U.S. dollar. Gold for April delivery hit a record of $991 an ounce, while crude oil for April delivery soared to a record of $103.51 a barrel on the New York Mercantile Exchange.

"We anticipate holding a larger than ordinary exposure to bonds to cushion the wild equity markets," said Paul Nolte, director of investments at Hinsdale Associates.

Treasury prices on Monday were mixed to lower, with the benchmark 10-year note off 13/32 at 99.16, its yield ($TNX) up to 3.555%.

The Institute of Supply Management's manufacturing gauge for February may fall back under the 50% mark, indicating economic contraction, economists predicted, after regional polls in New York, Philadelphia and elsewhere indicated downturns.

Readings under 50% in the ISM index indicate that the manufacturing sector is contracting, but it takes a much weaker reading near 41% for a recession to be called, economists say.

The ISM data is due out at 10 a.m. Eastern.

U.S. stocks plunged on Friday, with the Dow industrials losing 315 points, the S&P 500 dropping 37 points and the Nasdaq Composite losing 60 points. American International Group led the downturn after posting its largest loss in almost 90 years of business.

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