Stocks Limp Out of Second Quarter

Similarly, a Robert W. Baird analyst cut his earnings forecast and price targets for Bank of America (BAC Quote) and Wachovia (WB Quote). Bank of America was off 2.9% at $23.87, while Wachovia dropped 4.3% to $15.53.

After Friday's close, The Wall Street Journal reported that MBIA (MBI Quote) is selling $500 million in municipal bonds to make payments following a credit-rating downgrade of the bond insurer by Moody's.

MBIA denied the report and also said today that it will collateralize $3.9 billion of its guaranteed investment contracts and terminate another $3.6 billion in GICs. Chief Financial Officer C. Edward Chaplin said that the company does not face a "tenuous situation." Shares ended the day up 5.3% at $4.39.

Most of the trading during the session was about end-of-quarter buying and selling, said Randy Diamond, vice president of equity research sales and trading at Miller Tabak, in an email. He said this trading is significant as it pertains to the market's "haves" -- energy -- and "have nots" -- financials.

Traders were also responding to several moves on the M&A front. French phone company France Telecom (FTE Quote) announced it has dropped its $42 billion bid for Sweden's TeliaSonera, saying the acquisition was not crucial to its strategy. Shares climbed 8.3% to finish at $29.63.

Sector counterparts Sprint (S Quote) and Vodafone (VOD Quote) were among the day's winners, each up more than 5% at $9.50 and $29.46, respectively.

Meanwhile, mining concern ArcelorMittal (MT Quote) said it is taking a 60% stake in new steel presence Dubai Steel Trading. The Financial Times reported that Mittal is considering entering an acquisition fight over Rio Tinto (RTP Quote), which faces a hostile takeout bid from BHP Billiton (BHP Quote). Rio Tinto finished the day up 8.2% at $495, and BHP Billiton tacked on 2.8% at $85.19.