Stock Rally Takes a Rest

Updated from 4:04 p.m. EST

Stocks closed virtually unchanged Monday with the S&P 500 snapping a nine-session winning streak, as a troublingly weak dollar kept investors from celebrating another plunge in oil prices.

The Dow Jones Industrial Average added 3.80 points, or 0.04, to 10,391.30, its ninth gain in ten sessions; while the S&P 500 lost 1.28 points, or 0.11%, to 1164.89, after closing at a 32-month high Friday. The Nasdaq added 0.31 points, or 0.02% to 2039.25. The 10-year Treasury note was down 10/32 to yield 4.21%, while the dollar was sitting near an all-time low against the euro and a six-month low against the yen.

Volume was relatively weak on the New York Stock Exchange, where 1.3 billion shares changed hands with advancers trailing decliners 3 to 2. At the Nasdaq, 1.6 billion shares traded and advancers trailed decliners 5 to 4.

"The market is performing outstandingly," said Marc Pado, U.S. market strategist at Cantor Fitzgerald. "I was anticipating a bit more of a pullback going into today, given the weakness of the dollar that we saw last week.

"All in all, the market was probably facing resistance going into today, and if we get these kind of days where we don't give up a lot of ground, that's very positive," said Pado. "That's the type of pattern we're likely to build over the course of the week."

Stocks began the week at or near their highs for 2004, with only the Dow still negative for the year.

"We're continuing to see a good improvement in the technical background of the market," said John Hughes, managing director at Epiphany Equity Research. Friday's report showing strong job growth in October was "as important economically as it was from a sentiment standpoint," said Hughes.

Oil fell thanks to easing supply concerns and the relative attractiveness of stocks to speculators over the last several days. December crude closed lower at $49.09, after losing 52 cents.

"Crude could pull back to $40 or $42 and it would still be in a long-term uptrend," said Hughes, who added that although oil may head lower, the fundamental concerns over supply and demand would leave oil at the mercy of day-to-day news.