The Institute for Supply Management manufacturing index for July dipped 0.6 point to 52.6, signaling slightly slower growth in U.S. factory activity.
Economists had expected an unchanged reading of 53.2.
June's U.S. index rose 1.9 points to to 53.2, the highest since February 2015. Readings over 50 signal expansion.
But business investment fell for a third straight quarter in Q2, according to Friday's anemic GDP report. And durable goods orders fell 4% in June, the most in 22 months.
General Electric (GE) recently topped adjusted earnings estimates -- thanks to some hefty items excluded. But General Electric reported a dip in organic industrial revenue and a 16% dive in industrial orders.
Meanwhile, Ford Motor (F) raised red flags about the broader auto industry. Ford's Q2 earnings missed views largely on stalling U.S. sales and rising incentives spending. Ford now sees industrywide U.S. sales declining this year and in 2017. Auto parts makers Lear Corp. (LEA) and Gentherm (THRM) also gave disappointing reports.
Ford, General Motors (GM) and other automakers are due to report July U.S. auto sales on Tuesday. Tesla Motors (TSLA) will announce Q2 results on Wednesday. But Tesla's main concern is ramping up production to meet demand for its luxury electric cars, as it seeks to buy SolarCity (SCTY).
IBD'S TAKE: Can Tesla Motors ramp up production to 500,000 electric vehicles by 2018, along with a battery Gigafactory and CEO Elon Musk's goal of buying "cousin" firm SolarCity? Can Tesla meet or beat Q2 estimates and provide bullish near-term guidance?
The energy sector also could be a renewed problem for manufacturing. As oil prices rebounded in the first half of the year, the number of rigs in operation has picked up, and U.S. output has even increased, raising hopes for a recovery in energy-related capital spending. But oil prices tumbled nearly 14% in July to $41.50 a barrel, as of Friday. Oil prices tumbled 3.7% to $40.06 a barrel, undercutting $40 intraday.
In July's ISM report, the new orders gauge edged down 0.1 point to a still-strong 56.9. The production subindex rose 0.7 point to 55.4. But the employment fell 1 point to 49.4, while the order backlog measure tumbled 4.5 points to 48, the lowest since January.
China, European Manufacturing
Meanwhile, the official China manufacturing index, released Sunday night U.S. time, fell to 49.9 in July from 50 in June. That's the first reading signaling contraction in five months, as heavy flooding affected a large swath of the country. A separate Chinese factory gauge swung back to expansion, up 2 points to 50.6.
On Monday, the final eurozone manufacturing index came in at 52, below June's 52.8 but above the flash reading of 51.9. However, the final U.K. factory activity gauge was revised lower to 48.2, down nearly 4 points from June and its worst reading since February 2013, in the wake of the U.K. vote to exit the European Union.
