NEW YORK (
) - Stocks turned negative in the final minutes of trading Monday to finish in the red, after trading modestly higher through most of the trading session.
Dow Jones Industrial Average
shed 23 points, or 0.2%, to close at 12,198. The
slipped more than 3 points, or 0.3%, to close at 1310 and the
shed 12 points or 0.4% at 2730.
Telecom was the only S&P 500 sector to finish in positive territory.
were gainers on the Dow after receiving an upgrade at Baird.
were the biggest laggards.
Select energy stocks were in favor with
among the biggest gainers on the S&P 500 along with
Personal spending in February showed a larger-than-expected gain of 0.7% after inching 0.2% higher in January, even as rising food and energy prices threatened to strain household budgets. Economists had expected a 0.5% increase, according to
. Personal incomes rose 0.3%, as expected, after jumping 1% in January.
Pending home sales, a leading indicator of future sales of existing homes, rose 2.1% in February, according to the National Association of Realtors, offering an encouraging outlook for existing home sales. Economists were expecting only a 0.3% increase, according to
Crude oil prices also cooled off on reports that Western military forces
tipped Libyan power clashes in the rebels' favor, helping them to win back territories previously lost to Dictator Moammar Gadhafi's troops.
The May crude contract shed $1.42 to settle at $103.98 a barrel. The April
gold contract shed $6.30 to settle at $1,419.90 an ounce.
Japan's Nikkei index shed 0.6%, and Hong Kong's Hang Seng index declined by 0.4%. London's FTSE added 0.06% while the DAX in Frankfurt finished lower by 0.1%.
Investors are bracing themselves for an end to the Federal Reserve's quantitative easing program after St.Louis Fed President James Bullard told reporters in France over the weekend that the central bank could still review its "QE2" policy in forthcoming meetings, including considering cutting short the $600 billion bond buying program as the economy recovers.
Some are also expecting monetary tightening after
Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser recently voiced concerns about inflation.
UBS economists also took note of the Treasury's decision to sell its portfolio of mortgage-back securities, increased testing of reserve repurchase agreements with a broader set of counterparties by the Federal Reserve Bank of New York, and last week's announcement that Chairman Ben Bernanke plans to hold press conferences after some Federal Open Market Committee Meetings (FOMC) starting in April
"Taken individually, none of these would raise any concern. However, taken together, and viewed in the context of the language shifts seen in the March 15 FOMC statement, they would appear to suggest that the FOMC is accelerating its preparation for the eventual policy tightening," said Economists Maury Harris and Drew Matus in a recent note.
The economists said they view these moves as consistent with their outlook for the central bank to complete QE2 as planned in June before letting the balance sheet contract in the second half of the year, and raising the federal funds rate in January 2012.
The dollar was flat against a basket of currencies with the dollar index down by 0.02%.The benchmark 10-year Treasury slipped 4/32, raising the yield to 3.454%.
Trading activity was relatively light through most of the session although volumes climbed towards the end of the session to 618 million on the NYSE. Market breadth turned negative in the final hour with 39% of shares listed on the exchange gaining ground while 58% declined. More than 1.5 billion shares traded on the Nasdaq.
In corporate news,
CFO Carl Berquist noted
weaker-than-expected demand in North American markets, sending shares down 6.3% to $35.30. The comments weighed on other shares within the sector.
Starwood Hotels & Resorts
shed 4% to 6% as well.
Shares of interactive marketing company
rose 50.6% at $29.27 on news that it's
agreed to be acquired by online marketplace operator
for $29.25 a share, or $2.4 billion. eBay's stock shed 4.3% at $30.34.
gained 5.3% to $3.58 on the company's
progress in its patent dispute with
Research In Motion
Goldman Sachs upgraded coal company
to buy, saying that the company can continue to grow despite falling prices, but downgraded
to neutral from buy. Shares of Walter Energy rose 2.3% to $128.79 while Peabody's stock shed 2.4% to $70.87.
will pay a combined $38.8 million to acquire a 55% stake in Chicago-based craft brewer
Goose Island Beer.
Shares lost 1.1% to $56.81.
Uranium miners were in the red after the anti-nuclear Greens party in Germany won in a key regional election on Sunday. The preliminary results suggest that the opposition party composed of the Greens and their Social Democratic Party allies, could garner a narrow majority in the state legislature, which could prompt a shift in Germany's nuclear power policy, especially in the wake of the ongoing radiation issues in Japan.
sank 5% and 7% respectively on the news.
Meanwhile solar stocks benefiting from the development, with
among the prominent winners, gaining between 4% and 6% each.
-- Written by Melinda Peer and Shanthi Bharatwaj in New York
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.