Bad Day Turns Worse

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."

Cardillo moreover pointed out that the jump in oil was acting as a further drag on the market, and Roberts remarked that the development was "really the key" today. Last week's equities rally, he pointed out, was accompanied by a tumble in oil prices.

Crude futures hit a record high of $120.36 earlier before easing back to a $3.65 gain at $119.97 a barrel. At the same time, the U.S. dollar yielded 0.5% to the euro at $1.5496 and sank 0.4% against the yen.

The inflation of crude prices, believes Roberts, is demand-driven, and he said that -- barring a "major exogenous supply interruption, not just short-term disruptions" -- it will remain that way. So, eventually, he predicted, a ceiling will be placed on gas prices as people begin to pare back on their gas usage and look to new alternatives. He noted, however, that such changes will probably take awhile to materialize on a grand scale.

As for the M&A news on the corporate front, over the weekend Microsoft announced it had thrown in the towel on its months-long efforts to take out Yahoo!. The software maker said it was willing to sweeten its offer by some $5 billion, to $33 a share, but claimed Yahoo! wanted at least $5 billion more than that.