Manufacturing activity continued to lag in November amid a decline in inventories and new orders, according to the latest ISM Manufacturing reading released Monday.

The reading came in at 48.1 vs. an expectation of 49.4 and the previous month's reading of 48.3.

Though the level is usually reported as a simple number, it actually denotes the percentage of manufacturers planning to expand operations. A reading below 50 represents contraction; November was the fourth straight month below the expansion level.

Stocks fell on the report, with the Dow Jones Industrial Average off more than 200 points in late morning trading.

New orders slumped to 47.2, down 1.9 percentage points from October's 49.1. Inventories, which are a key input for gross domestic product, came in at 45.5, down 3.4 points from the previous month.

The numbers come amid speculation about the pace of U.S. growth.