While you were sleeping: UPDATED Dow rises further in record-breaking rally

The International Monetary Fund's downgrade of its outlook for the global economy also weighed on sentiment.

The IMF cut its forecasts by 0.1 percentage point this year and next to 3.1% and 3.4% respectively as the unexpected UK vote to leave the European Union created a wave of uncertainty amid already-fragile business and consumer confidence, it said in a statement.

Shares of Netflix tumbled 13% after the company's latest quarterly results bolstered concern about its tepid subscriber growth.

It wasn't all bad news. Shares of Johnson & Johnson rose 1.7% after it posted quarterly earnings that surpassed expectations and upgraded its sales outlook for the year.

"We continue to see good momentum through the first half of 2016, delivering solid results in the second quarter, supported by strong underlying growth across our enterprise," Johnson & Johnson CEO Alex Gorsky said in a statement.

"We saw notable strength in our Pharmaceuticals business due to the continued success of new products, and also achieved significant clinical milestones, advancing our robust pipeline," he added.

At the close, the Dow Jones Industrial Average was up 25.96 points, or 0.1%, to 18,559.01, continuing its record-breaking rally. It is now 3% above its pre-Brexit level.

The Nasdaq Composite Index fell 0.4% to 5036.37 and the Standard & Poor's 500 Index declined 0.1% to 2163.78.

The Dow also saw a 2.1% rise for McDonald's, offset by slides in Microsoft and Goldman Sachs, which fell 1.5% after its result beat expectations but its flagship trading business didn’t bounce back as much as rivals.

After the close, Microsoft reported a drop in reveniue but a better-than-expected rise in profit

Monsanto rejects Bayer again
In corporate news, Monsanto said it rejected Bayer's latest takeover offer "as financially inadequate and insufficient to ensure deal certainty," adding that it remains open to further talks with the Germany company.

Earlier this month Bayer raised its previously-rejected bid for Monsanto to $US125 a share in cash, up from an initial $US122 a share.

Bayer responded that it was "disappointed" in Monsanto's decision to reject its latest offer but added that it was looking forward to further talks with Monsanto.

Shares of Monsanto closed 0.4% higher at $US106.87 after earlier rising as high as $US109 and falling as low as US$105.41.

Shares of Bayer closed 0.3% lower in Frankfurt.

Europe's Stoxx 600 Index ended the session with a retreat of 0.4% from the previous close, as mining stocks fell.

France's CAC 40 index fell 0.6% while Germany's DAX index dropped 0.8%. The UK's FTSE 100 index eked out a 0.03% gain.

European Central Bank President Mario Draghi will speak on Thursday after the central bank's first monetary policy gathering since the UK decided to leave the European Union.

"The ECB event is going to be the major point of interest for markets this week," Daniel Murray, head of research at EFG Asset Management in London, told Bloomberg.

"I suspect they will leave things unchanged, but investors will monitor closely what Draghi says afterwards."

(BusinessDesk)