Updated from 3:59 p.m. EDT
Blue chips faded after briefly clawing back to positive territory Monday during a volatile day of trading. The
fell for the ninth time in 10 sessions.
After being down by as many as 100 points, the
Dow JonesIndustrial Average
closed lower by 18.73 points, or 0.17%, to 11,125.33. The
lost 4.97 points, or 0.39%, to 1262.06. Both put in a strong rally at around 3 p.m. EDT before falling back.
The Dow bounced from session lows thanks to gains of 1.3% or more in components
"We had an attempt at stabilization that failed," said Michael Sheldon, chief market strategist with Spencer Clarke LLC. "Still, we have many sectors that are oversold. We may be in for some backing and filling. We might see a tradeable bottom."
The Comp fell 21.03 points, or 1%, to 2172.86. The index was under pressure as the Philadelphia Semiconductor Sector index fell 4.2%.
About 2.05 billion shares changed hands on the
New York Stock Exchange
, with decliners outpacing advancers by a 2-to-1 margin. Volume on the Nasdaq was 2.28 billion shares, with decliners also beating advancers 2 to 1.
"This type of activity shows a huge underlying battle and a lot of volatility," said Paul Mendelsohn, chief investment officer with Windham Financial. "The Dow is leading the market, so we're still talking about rotation into large-cap stocks. We have to see how the advance/decline line moves to continue this bounce."
The 10-year Treasury bond rose 6/32 in price to yield 5.03%, afterbriefly falling below 5%. The dollar rose against the euro.
"We still have a flight to safety to the bond market," said Barry Hyman, equity market strategist with Ehrenkrantz King Nussbaum. "Thereis a flattening and almost an inverting the yield curve. The volatilityis still quite high."
In commodity markets, gold futures cut early losses and rose 20cents to close at $657.70 an ounce. Gold dropped as low as $643.50 inearly trading. Copper was down a penny to $3.46 a pound while silvertacked on 7 cents to $12.43 an ounce. All three metals are down morethan 10% in a little over a week after big rallies that left them at ornear all-time highs.
Energy prices also reversed early losses on fears of the upcoming hurricane season, with June crude finishing up 70 cents to $69.23 a barrel. The National Hurricane Center said Monday that it expects another active hurricane season in 2006. Crude had dipped below $68 a barrel earlier in the session. Gasoline rose 4 to $2.06 a gallon.
By sector, the Amex Oil index fell 1.3%and the Philadelphia Oil Service Sector index was lower by 0.5%.Meanwhile, the Amex Gold Bugs index lost 1.1% and the Philadelphia Housing Sector index closed down 1.6%.
Gold stocks were hit hard, with
down 3.7% and
gave up 0.9%.
was off 1%.
Concerns that rising inflation will keep the
in rate-tightening mode for at least another month have hammered stocksover the past two weeks. Since coming within 80 points of its all-timehigh on May 9, the Dow is down almost 5%, while the Nasdaq has shedclose to 8%.
Dallas Fed President Richard Fisher spoke Monday regardingcommodities, saying that rising global resource utilization may stillboost inflation "as growing demand in emerging economies drives up theprices of oil, copper
No major economic reports are due Monday or Tuesday, but traderswill have a slew of data to digest as the week progresses. On Wednesday,the government is expected to say durable goods orders fell 0.5% lastmonth after surging 3.9% in March. An estimate of first-quarter grossdomestic product growth is expected to be revised up from 4.8% to 5.8%.
In earnings news,
posted first-quarter earnings of $841million, or $1.06 a share, up from $586 million, or 73 cents a share,last year. The Thomson First Call consensus was for EPS of 94 cents.
Looking ahead, Lowe's said that the slowdown in the housing marketcould cause problems, sending shares down $2.82, or 4.5%, to close at $59.82. The decline pressured the S&P Retail index, which lost 1.4%.
said it had fiscal third-quarter earnings of $166 million, or 40 cents a share, up from $146 million, or 35 cents a share last year. Results beat the Thomson First Call estimate of 35 cents a share. The stock rose $1.10, or 3.4%, to finish at $33.75.
are scheduled to report quarterly resultsTuesday. Toll Brothers traded lower ahead of the report, ending down3.3% to $26.90.
reiterated its second-quarter forecast for earnings of 24to 26 cents a share before items. The Thomson First Call consensusstands at 25 cents a share for the quarter. But the company trimmed itsliquid-crystal display volume guidance. Corning lost $1.21, or 4.9%, to $23.29.
, the parent company of the New York StockExchange, unveiled a formal proposal to merge with European exchangeoperator Euronext Monday morning. The stock-and-cash offer valuesEuronext at $10.2 billion, slightly below its closing marketcapitalization on Friday. NYSE shares finished down $1.65, or 2.6%, to$62.85.
added 3.2% after
over the weekend said the company is expected to rebound. The stock isoff 25% this year. Shares were up 93 cents to close at $30.46.
was trading lower after the companyannounced it would raise its quarterly dividend by 25% to 15 cents. Thecompany's board also approved a plan to repurchase up to 200 millionshares, continuing a program initiated in September 1994. The stock fell 33 cents, or 0.6%, to $51.90.
Among rating moves, RBC Capital upgraded
to sectorperform from underperform, while UBS upgraded
to buy fromneutral.
Amazon.com was higher by 89 cents, or 2.6%, to $34.83. Lucent,however, lost 3 cents, or 1.2%, at $2.52.
Overseas markets fell, with London's FTSE 100 losing 2.2% to 5532and Germany's Xetra DAX falling 2.2% to 5546. In Asia, Japan's Nikkeislid 1.8% to 15,858, while Hong Kong's Hang Seng tumbled 3.1% to 15,806.