Updated from 4:06 p.m. EST

Stocks closed narrowly mixed Monday as traders hunkered down ahead of Alan Greenspan's last meeting as chairman of the

Federal Reserve

.

The

Dow Jones Industrial Average

lost 7.29 points, or 0.07%, to 10,899.92, ending a two-day winning streak. The

S&P 500

tacked on 1.48 points, or 0.12%, to 1285, and the

Nasdaq Composite

added 2.55 points, or 0.11%, to 2306.78.

About 1.64 billion shares changed hands on the

New York Stock Exchange

, with decliners beating advancers by a 6-to-5 margin. Volume on the Nasdaq was 1.94 billion, with decliners outpacing advancers 8 to 7.

The 10-year Treasury was down 7/32 in price to yield 4.54%, while the dollar rose against the yen and euro.

Stocks rose on Thursday and Friday as corporate earnings impressed and a weak report on fourth-quarter economic growth encouraged interest-rate doves. Trading on Monday was muted ahead of tomorrow's Federal Open Market Committee meeting -- Alan Greenspan's last.

"The focus is on the Fed," said Paul Nolte, director of investments at Hinsdale Associates. "We're very concerned about what they're saying, anticipating a change in language to give Ben Bernanke the room to do what he wishes in March."

The Fed is widely expected to raise interest rates by a quarter point for the 14th straight time, to 4.5%. As usual, the drama will be in the FOMC's policy statement, in which traders look for clues about how many more -- if any -- rate hikes are likely. Fed funds futures put odds for a quarter-point March hike at about 50-50.

On the economic front Monday, the Commerce Department said personal income rose 0.4% in December, matching economists' expectations. Personal spending increased 0.9%, just ahead of estimates. The core personal consumption expenditure price index, a key measure of inflation, rose 0.1%.

To view Gregg Greenberg's video take of the market, click here

.

"With all eyes now focused on tomorrow's farewell party at the Fed, this stronger-than-expected data may appear to delay the long-anticipated termination of rising interest rates," said Ken Tower, chief market strategist with CyberTrader.

"There is no question that the tone has turned more positive," said Marc Pado, a market strategist with Cantor Fitzgerald. "We haven't broken out yet, but the markets are poised. Now all we need is for the news to hit the ball out of the park, and it needs to be perfect. Crude is still high and the yield curve is still flat, but the market's focus is on other things right now."

Oil, which gained $1.50 a barrel on Friday as concerns again rose about Iran's nuclear ambitions, finished up another 59 cents to close at $68.35 a barrel.

In corporate news, Wal-Mart said it expects to post same-store sales growth of 4.7% in January, toward the high end of its 3% to 5% range, reflecting strong sales of food and groceries. Wal-Mart had comps growth of 2.2% in December. Shares rose 57 cents, or 1.2%, to $46.41.

Exxon Mobil

(XOM) - Get Report

reported fourth-quarter earnings of $10.71 billion, or $1.71 a share, up from $8.42 billion, or $1.30 a share, a year ago. Excluding special items, the oil company earned $10.32 billion, or $1.65 a share, beating the Thomson First Call consensus for EPS of $1.44. Revenue jumped to $99.7 billion from $83.4 billion a year ago. The stock jumped $1.82, or 3%, to $63.11.

Schering-Plough

( SGP) swung to a fourth-quarter profit on a 6% rise in sales. At $104 million, or 7 cents a share, the profit was a penny short of estimates. Schering-Plough slipped 51 cents, or 2.5%, to $19.57.

Kodak

( EK) posted a fourth-quarter loss of $52 million, or 18 cents a share, compared with a loss of $59 million, or 20 cents a share, a year ago. Sales rose 12% to $4.20 billion. Excluding restructuring charges and other items, Kodak earned $151 million, or 51 cents a share, ahead of the Thomson First Call consensus for earnings of 39 cents a share on sales of $4.15 billion. Kodak lost 62 cents, or 2.4%, to close at $25.75.

J.B. Hunt Transport Services

(JBHT) - Get Report

posted fourth-quarter net income of $65.3 million, or 41 cents a share, tripling earnings of $19.8 million, or 12 cents a share, a year earlier. Analysts expected earnings of 36 cents a share, according to Thomson First Call. The transportation company's shares were higher by $1.33, or 5.9%, to $23.95.

The rise in J.B. Hunt boosted the Dow Jones Transportation Average, finishing up 1%. Meanwhile, the Philadelphia Oil Service Sector Index added 2.9%, and the Amex Oil Index rose 2.3%, thanks to Exxon Mobil's earnings. The Amex Airline Index was also up 2.9%, and the Philadelphia Housing Sector Index was higher by 1.6%.

Elsewhere, the Philadelphia/KBW Bank Sector Index lost 0.4%, and the S&P Retail Index was off 0.4%.

On Tuesday, earnings reports are expected from

Google

(GOOG) - Get Report

Altria

(MO) - Get Report

,

Merck

(MRK) - Get Report

,

Phelps Dodge

( PD), and

Valero

(VLO) - Get Report

.

In merger news, European steelmaker Arcelor rejected the $23 billion hostile takeover offer made last week by Dutch

Mittal Steel

(MT) - Get Report

. Mittal is reportedly trying to round up political support for its bid, which would create the world's biggest steel company. The stock jumped $1.44, or 4.2%, to $35.70.

Serono

( SRA), meanwhile, has reportedly resumed discussions toward selling itself to

GlaxoSmithKline

(GSK) - Get Report

. Serono's original asking price of $15 billion is said to have been reduced. Serono was up 14 cents, or 0.7%, to close at $19.16.

Marathon Oil

(MRO) - Get Report

announced a $2 billion stock repurchase program set for the next two years. The company also said it will pay a regular quarterly dividend of 33 cents a share on March 10 to shareholders of record Feb. 16. Marathon added $1.51, or 2%, to $76.55.

Among ratings moves, WR Hambrecht upgraded

Yahoo!

(YHOO)

to buy from hold, citing the company's recent additions of Flickr, Yahoo! Answers and Yahoo! 360. The firm also upped its stock price target to $42 from $40. Shares dipped 4 cents, or 0.1%, to $35.05.

Banc of America Securities upgraded retailer

Gap

(GPS) - Get Report

to buy from neutral, on the basis of the company's risk-to-reward ratio. Gap climbed 57 cents, or 3.3%, to $17.95.

Also, Banc of America lowered its stock price target for

Apple

(AAPL) - Get Report

to $82 from $85, citing concerns iPod manufacturing levels have been cut for the fiscal second and third quarters. Apple rose $2.97, or 4.1%, to $75.

Overseas markets were mixed. London's FTSE 100 was down 0.1% at 5780, and Germany's Xetra DAX rose 0.2% to 5660. In Asia, Japan's Nikkei rose 0.6% overnight to 16,551, while Hong Kong's markets were closed for a holiday.