Stocks Get Bogged Down

Wall Street closes little changed ahead of earnings season.
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Updated from 4:14 p.m. EDT

Wall Street was sluggish for much of the session Monday and ended narrowly mixed as traders coming off a long holiday weekend decided to keep their powder dry ahead of the start of earnings.

The

Dow Jones Industrial Average

added 8.94 points, or 0.07%, at 12,569.14, and the

S&P 500

was up 0.85 point, or 0.06%, at 1444.61. The

Nasdaq

eased 2.16 points, or 0.09%, to 2469.18, ending its win streak at six.

For the most part, stocks were never able to gather any upward momentum despite a number of factors that were, at least theoretically, positive: a solid jobs report, speculation about a mammoth buyout and a plunge in oil prices.

"Valuations of the markets remain high, investor sentiment is also high, and interest rates are rising -- a triple threat that may prevent the markets from rising significantly from here," said Paul Nolte, director of investments with Hinsdale Associates.

"For now, safe is better than sorry," he continued. "We may miss some of whatever upside exists, but we don't want to participate in the inevitable decline."

U.S. stocks have started the second quarter on an upbeat note. Last week, the Dow jumped 1.7%, the S&P 500 rose 1.6% and the Nasdaq climbed 2.1%.

About 2.36 billion shares changed hands on the

New York Stock Exchange

, with advancers matching decliners. Volume on the Nasdaq reached 1.74 billion shares, and winners outpaced losers 9 to 7.

As a new week got under way, the market opened higher following a report from the U.K. that a group of investors might be preparing to bid for

Dow Chemical

(DOW) - Get Report

. The deal could be worth $50 billion and would be the largest leveraged buyout in history. Dow Chemical added 4.9% to close at $46.63.

Rumors that such a proposal was a possibility first emerged several weeks ago after Texas utility company

TXU

(TXU)

reached an agreement to be taken over in a massive LBO.

To view Aaron Task's video take on today's market, click here

.

Meanwhile, a strong employment report Friday was supporting the notion that the economy is running at a healthy clip. The stock market was closed that day for a holiday, but the Labor Department still issued its monthly jobs report.

According to the government, 180,000 workers joined payrolls in March, about 50,000 more than expected, and the unemployment rate edged down to 4.4% from 4.5% the prior month.

Robert Pavlik, chief investment officer with Oaktree Asset Management, said the data had investors worried about inflation and the possibility that the

Federal Reserve

won't be inclined to lower interest rates.

"Now, without the likelihood of a rate cut, it puts into question what is in store for the economy," he said. "The markets are also a bit cautious as we enter into the earnings season."

After Tuesday's close, Dow component

Alcoa

(AA) - Get Report

unofficially kicks off the quarterly crush of reports. Also this week are

Genentech

(DNA)

and

General Electric

(GE) - Get Report

, among others.

In the absence of any fresh economic data, Treasury prices tumbled. The 10-year note was off 16/32 in price, yielding 4.75%, and the 30-year bond was losing 21/32, yielding 4.92%.

Elsewhere, commodities were mostly lower. Crude oil sank $2.77, or 4%, to $61.51 a barrel, while gold finished down by $2.50 at $676.90 an ounce. Silver also fell, but copper eked out a gain.

Back on the corporate side, Dow component

Citigroup

(C) - Get Report

plans to acquire Taiwan's Bank of Overseas Chinese for about $426 million in cash. The stock edged higher by a penny to close at $51.58.

Advanced Micro Devices

(AMD) - Get Report

gained 3.8% despite a warning that first-quarter revenue will fall short of estimates. AMD rose after saying it plans to restructure its business model and cut capital spending.

AMD tacked on 49 cents to $13.35. Rival

Intel

(INTC) - Get Report

was higher by 2.7% at $20.10.

Rail concern

Burlington Northern Santa Fe

(BNI)

was higher after a

Securities and Exchange Commission

filing stated that billionaire investor Warren Buffett's

Berkshire Hathaway

(BRK.A) - Get Report

has purchased a 10.9% stake in the company, making it the largest shareholder.

Shares of Burlington Northern ended up 6.5% to $88.08. Other freight railway names also finished higher.

Union Pacific

(UNP) - Get Report

rose 3.8%,

Norfolk Southern

(NSC) - Get Report

gained 3.8%, and

CSX

(CSX) - Get Report

added 2.2%.

Subprime lender

American Home Mortgage Investment

(AHM)

slid 15.2% after the company slashed its first-quarter and full-year earnings forecasts by more than 25%. American Home also reduced its dividend by 37.5% to 70 cents a share. Shares were down $3.92 at $21.92.

Overseas, Tokyo's Nikkei 225 rose 1.5% at 17,743. Hong Kong's Hang Seng was closed for a holiday, as were most European bourses.