Wall Street Opens Week With Losses

Updated from 3:31 p.m. EDT

Stocks in New York finished lower Monday as prospects unraveled for at least one big proposed merger, and oil prices again charged into uncharted territory.

The Dow Jones Industrial Average was off 89 points at 12,969, and the S&P 500 gave up 6 points to 1407. The Nasdaq Composite lost 13 points to 2464.

Even amid the apparent collapse of an anticipated tie-up between Microsoft (MSFT Quote) and Yahoo! (YHOO Quote), however, Peter Cardillo, chief market economist with Avalon Partners, believes that stocks' broader movements represent "a normal pullback after last week's healthy run-up."

Doug Roberts, chief investment strategist at ChannelCapitalResearch.com, agreed that the market's seeming reaction is probably, in essence, an incidental move. "It's more that everybody doesn't trust what's happening," he said. "They're looking for any excuse they can to take tips under the table. If you were looking to trade something totally on fundamentals, there were as many excuses last week for stocks to go down when they rallied."

Bruce Zaro, chief technical strategist with Delta Global Advisors, agreed. "I think [the merger news] is probably as good of an explanation or an excuse as any," he said. "This is pretty typical from what I've seen, that Mondays at least start with some weakness. But certainly I think the market will continue to exhibit this two-steps-up and one-step-back phenomenon."

Zaro added that the "old highs," roughly 1,000 points away on the Dow, are on his radar screen. "The upside from here on out might be a little bit slower than what we've had over the past month or so," he said, tentatively predicting that the current run-up will take several months to unfold. "I would expect this rally to play itself out in fairly dramatically overbought conditions. Right now we're only slightly overbought."