By Saumya Vaishampayan 

U.S. stocks fell Monday, with the Nasdaq Composite snapping a five-session winning streak as the biotechnology sector posted steep losses.

The Nasdaq Composite lost 31.84 points, or 0.6%, to 5060.25.

The Dow Jones Industrial Average fell 42.17 points, or 0.2%, to 18037.97, and the S&P 500 declined 8.77 points, or 0.4%, to 2108.92. The broad-market indexes fell for the first time in four sessions.

Even with Monday's pullback, stocks hovered near all-time highs. The S&P and Nasdaq both closed at records Friday, marking the sixth for the S&P and the second for the Nasdaq this year. The Dow its 1.4% below its most recent record.

The Nasdaq Biotechnology Index lost 4.1%, falling for the second session in a row. Health-care stocks in the S&P 500 posted the biggest sector decline, down 1.8%.

"The weakness in biotech continues," said Sahak Manuelian, a managing director at Wedbush Securities. "The group has been very strong and you're starting to see some weakness post earnings," he added.

That includes Biogen Inc., which on Friday said safety concerns have led some patients to reconsider using its multiple-sclerosis pill, contributing to lower-than-expected sales of the drug. Biogen shares slipped 3.1% Monday, after falling 6.6% Friday.

Celgene Corp. agreed to buy privately held Quanticel Pharmaceuticals Inc. for an upfront payment of $100 million in a move that will advance its pipeline of cancer therapies. Celgene shares fell 3.4%.

In other health-care news, Mylan NV's board rejected Teva Pharmaceutical Industries Ltd.'s unsolicited bid. Mylan shares fell 5.7% and those of Teva slipped 4.3%.

Earnings will continue to stream in this week. Including results from 201 companies in the S&P 500, earnings are on track to decline 2.8% from a year earlier, according to FactSet. A decline in year-over-year earnings in the first quarter would be the first since the third quarter of 2012, when earnings fell 1%.

Going into the reporting season, analysts slashed forecasts as they expected the strong dollar and weak oil prices to weigh on profits and revenues. About 73% of companies have beat those lowered profit expectations, while just 47% of companies have topped revenue estimates, according to FactSet.

"There's very little inflation and usually inflation helps with revenue growth" as people are less likely to postpone purchases in a high-inflation environment, said Sam Stovall, U.S. equity strategist at S&P Capital IQ.

"This bull market does have legs, but we're getting a bit vulnerable to a correction," said Mr. Stovall. "Because interest rates are so low, inflation is so low...there are not a lot of alternatives to equities."

The economic calendar is busy this week, including the first reading on first-quarter U.S. economic growth, consumer spending for March and the Federal Reserve's preferred inflation gauge. The Fed's statement on monetary policy, due Wednesday, will also attract attention.

Jeff Carbone, co-founder of Cornerstone Financial Partners, said he recently boosted his allocation to cash to about 10% and put more money into international stocks as he expects U.S. stocks to pull back in the near term. Cornerstone manages about $1.1 billion. Mr. Carbone said he remains bullish on stocks for the year. "We'll look to redeploy that [cash] in the next few months into sectors like consumer discretionary in the U.S.," he added.

European stocks rose after Greece reshuffled its team for bailout negotiations. France's CAC 40 gained 1.3% and Germany's DAX rallied 1.9%. Time is running out for Greece and its creditors to reach a new bailout deal, with the loans Greece owes to the International Monetary Fund due in early May.

In other corporate news, Applied Materials Inc. and Tokyo Electron Ltd. said they would abandon their plan to merge, citing problems with the U.S. Department of Justice. The deal was unveiled in September 2013 and would have created a company with an estimated market value of $29 billion. Shares of Applied Materials fell 8.4%.

Tesla Motors Inc. shares rose 6% after a Deutsche Bank analyst said Tesla's new stationary storage business could add $100 to the value of the company's shares.

In commodity markets, gold futures rose 2.4% to $1203.30 an ounce. Crude-oil futures slipped 0.3% to $56.99 a barrel.

The yield on the 10-year Treasury note rose slightly to 1.923% from 1.917% on Friday. Yields rise as prices fall.

Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com

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