A report from the Institute for Supply Management (ISM) showed on Monday the U.S. manufacturing sector's activity grew at a slower pace in February compared to a month ago.

The ISM's index of manufacturing activity came in at 50.1 percent last month, down 0.8 percentage point from the January reading of 50.9 percent. That was below economists' forecast for a 50.5 percent reading.

A reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

According to the report, the New Orders Index stood at 49.8 percent, a decline of 2.2 percentage points from the January reading and the Production Index registered 50.3 percent, down 4 percentage points compared to the January reading. Meanwhile, the Employment Index recorded 46.9 percent, an advance of 0.3 percentage point from the January reading, the Backlog of Orders Index posted 50.3 percent, a gain of 4.6 percentage points compared to the January reading and the Supplier Deliveries Index registered 57.3 percent, up 4.4 percentage points from the January reading. Elsewhere, the Prices Index showed a fall of 7.4 percentage points to 45.9 percent in February from January.

Timothy R. Fiore, Chair of the ISM Manufacturing Business Survey Committee said, "The past relationship between the PMI and the overall economy indicates that the PMI for February (50.1 percent) corresponds to a 2.1-percent increase in real gross domestic product (GDP) on an annualized basis."