Stocks briefly cut losses on Monday following a report that showed U.S. factory activity contracted again in February, but at a less severe rate.

The Dow Jones industrial average <.DJI> fell to its lowest level since May 1997 on an intraday basis, hit by a sell-off in financial and energy stocks.

Another report showed construction spending in January tumbled by a larger-than-expected 3.3 percent.

The Dow Jones industrial average <.DJI> was down 143.13 points, or 2.03 percent, at 6,919.80. The Standard & Poor's 500 Index <.SPX> was down 14.99 points, or 2.04 percent, at 720.10. The Nasdaq Composite Index <.IXIC> was down 17.21 points, or 1.25 percent, at 1,360.63.

(Reporting by Ellis Mnyandu; Editing by James Dalgleish)