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Stocks Inch Lower

The averages end down, despite solid reports from Merck and 3M.

Updated from 4:05 p.m. EST

Stocks inched lower Monday as investors took some money off the table following last week's climb.

The

Dow Jones Industrial Average

closed down almost 9 points, or 0.1%, at 8328, while the

Nasdaq

fell 1 point, or 0.1%, to 1424. The

S&P 500

lost 1 point, or 0.1%, to 892.

"All in all, it's a pretty nondescript day," said Bryan Piskorowski, market analyst at Prudential Securities. "The bulls

did not mount much of an effort, choosing to wait for more economic and earnings data due out later in the week."

Piskorowski said investors spent the day digesting last week's gains. The Nasdaq rose almost 5% last week, which was shortened due to the Good Friday holiday. The Dow gained 1.6% on the week, while the S&P 500 rose almost 3%.

Although market internals "continue to improve," Paul Nolte, director of investments at Hinsdale Associates, said there is too much complacency in the market, which ultimately could send stocks lower in the days and weeks ahead.

Like other analysts, Nolte pointed out that sentiment measures like the Nasdaq Volatility index and CBOE Volatility index are at multimonth lows. "Each are more than 20% below 29- and 40-week averages as well as 15% below 10-week averages," he said. "With the exception of Nov. '98, each time the above has occurred, the markets were at or near short/intermediate term tops."

The VIX and VXN indices fell again Monday to 24.27 and 35.49, respectively.

A slew of earnings results added to the uncertain tone. Diversified manufacturer

3M

(MMM) - Get Report

said first-quarter earnings hit $1.42 a share, slightly ahead of forecasts, on an 11% jump in revenue to $4.32 billion. The stock weighed heavily on the Dow last week after an analyst downgrade. Shares were down 0.12% at $129.83.

Meanwhile, pharmaceutical giant

Merck

(MRK) - Get Report

said it earned 76 cents a share in the first quarter, in line with expectations, while revenue jumped 10% to $13.39 billion. Merck was up 2% at $56.97.

Appliance maker

Whirlpool

(WHR) - Get Report

reduced estimates for the full year after saying first-quarter income beat analysts' expectations. Shares of Whirlpool were up 2% at $54.73.

While the outlook for earnings remains unclear, analysts have expressed hope that individual investors are beginning to show interest in the market again. According to two sets of data, net inflows into stock funds jumped sharply for the week ended Wednesday. Trim Tabs, which tracks fund flows, said net inflows surged to $6.7 billion in the latest week, the largest net inflow into all types of stock funds in more than a year.

On the economic front, the leading economic indicators, a proxy for the economy over the next six months, fell 0.2% in March after a 0.5% drop in February. The result was in line with economists' estimates.

"This data suggests continued sluggish growth ahead," said Merrill Lynch economist David Rosenberg. "Half of the components fell, with a drop in building permits and higher jobless claims accounting for most of the decline."

In other news, elevator and aircraft-parts maker

United Technologies

is in talks to acquire security services firm

Chubb PLC

for $1.57 billion, according to media reports. Shares of the company were up 1.6% at $60.94.

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The New York Stock Exchange slapped

FleetBoston

with a $150,000 fine in connection with a probe into the alleged abuses of the bank's specialists on the trading floor. The bank's shares were up 0.7% at $25.50.

Williams Co.

(WMB) - Get Report

agreed to sell its 54.6% stake in

Williams Energy Partners

(WEG)

to a private group led by Madison Dearborn Partners, Carlyle Group and Riverstone Holdings. Williams was up 11% at $6.59.

Among other companies reporting earnings Monday, programmable-chip designer

Xilinx

(XLNX) - Get Report

said Thursday after the closing bell that its quarterly profit was higher than a year ago, and the company said revenue in the current quarter will beat analysts' estimates. Shares of Xilinx were down 0.6% at $26.23.

Lexmark

(LXK)

, a printer maker, said first-quarter profit and revenue rose, and the company said second-quarter earnings would be roughly in line with analysts' forecasts. Lexmark's shares were up 0.4% at $69.50.

Sprint

said after the bell Monday that profit rose due to one-time gains, but the firm said revenue fell at its main long distance and local telephone business. Sprint was up 2% at $11.27.

About a third of S&P 500 companies have reported earnings so far. Earnings growth, as measured by those companies that have reported results and those yet to report, stands at about 10.2% for the first quarter, according to Thomson Financial. That is up from the 8.3% growth expected by analysts just a week ago.

Chipmaker

Intel

(INTC) - Get Report

said Sunday it will slash prices of its fastest microchips by as much as 38%, ahead of the launch of its new Pentium 4 chips this spring. Shares were down 0.05% at $18.65.

American Airlines' parent,

AMR

(AMR)

, skidded 23% to $3.85 after flight attendants threatened to hold yet another vote over pay concessions amid news of planned bonuses for several top executives of the airline.

Wal-Mart

(WMT) - Get Report

said Easter sales were at the low end of its estimates, with weak sales of summer apparel.

On the political front, Treasury Secretary John Snow said he would settle for half the dividend tax cut proposed this year if Congress agreed to eliminate the tax altogether during the rest of the decade, according to a

Wall Street Journal

interview.

The dollar was firmer against the yen but weaker against the euro. Treasuries fell, with the 10-year note down ¿ to yield 3.98%. Nymex crude was up 1% to $30.87 ahead of an OPEC meeting this week.

Overseas markets were mixed, with Japan's Nikkei gaining 1.2% to end at 7969, while Hong Kong's Hang Seng fell 1.1% to 8579. European markets were closed for the Easter holiday.