Updated from 4:04 p.m. EST

Stocks closed mixed Monday amid a disappointing start to the holiday season at

Wal-Mart

(WMT) - Get Report

and nagging worries about the nation's current account and budget deficits.

The

Dow Jones Industrial Average

lost 46.33 points, or 0.44%, to 10,475.90, mostly due to Wal-Mart's 4% decline, having posted a triple-digit loss earlier in the session. The

S&P 500

lost 4.08 points, or 0.34%, to 1178.57, while the

Nasdaq

bounced back and rose 4.9 points, or 0.23%, to 2106.87.

About 1.37 billion shares turned over on the

NYSE

, where decliners outpaced advancers by a ratio of about 4 to 3. On the Nasdaq, more than 1.84 billion shares changed hands, where advancers beat decliners 3 to 2.

The 10-year Treasury note fell 20/32 in price to yield 4.33%, a four-month high, reflecting concerns that higher interest rates might be necessary to attract foreign buyers of U.S. securities. The dollar, meanwhile, was flat against the yen and euro, having touched a round of new record lows against the European currency last week.

Oil futures ended slightly higher, with the January contract up 32 cents to $49.76 in Nymex floor trading.

Early returns on weekend retail results were generally bullish, with the research outfit ShopperTrak estimating that Friday sales rose 10.8% from a year ago and Visa International saying its customers spent 14% more at retail stores on Friday and Saturday.

One sore spot was Wal-Mart, which warned that November same-store sales would rise just 0.7% from last year. It had previously predicted a gain of 2% to 4%. Wal-Mart ended down $2.17 to $53.15.

After a strong start, the market appeared to reconsider its initial assessment of retail strength.

"An analyst said

retailers' sales gain happened in the early hours on Friday when there were deep discounts, like a DVD player being sold for $25. There weren't a lot of margin gains," said Larry Perruzi, an equity trader with Boston Company Asset Management. "The market never really lived up to the advertisements on the futures. What compounded this was the move with the 10-year Treasury, spurred on by foreign sellers. The Treasury market fell apart, which put pressure on the market. Without a follow-through, this is what we end up with."

Many other retailers posted declines on Monday.

Kmart

(KMRT)

fell $5.38 to $102.01,

Best Buy

(BBY) - Get Report

fell $1.14 to $57.78,

Sears

(S) - Get Report

ended down $1.89 to $52.41, and

Target

(TGT) - Get Report

lost 29 cents to $51.92.

Retail sector aside, some market watchers say the recent rally is looking tired.

"From a trader's point of view, we're at a critical juncture. We had a terrific rally from the August and October lows," said Ken Tower, chief market strategist at CyberTrader. "That rally has stalled over the last couple of weeks. For traders this is a big resistance area. This is where the balance has tipped over to the sellers' side."

The major indices staged something of a reversal in the afternoon, but blue-chip stocks failed to hold the gains.

"While the fear of higher interest rates cut short the rally, it appears the market is responding to a very strong technical move," said Peter Cardillo, chief market analyst at S.W. Bach & Co. "The late reversal may also be the dollar holding on to the slim gains."

Apple

(AAPL) - Get Report

, which is expected to see blockbuster turnover of its iPod music player this month, rose $3.89, or 6%, to $68.44.

Bank of America raised its estimate of iPod unit sales to 4.1 million in the current quarter and set an earnings estimate of 51 cents a share, about 7 cents above the Thomson First Call consensus. Merrill put iPod sales at 4 million, up from its old estimate of 3.5 million, and raised its price target to $78 from $61.

IBM

(IBM) - Get Report

announced production plans for a chip designed for home entertainment products on Monday. The report said the chip, developed by IBM,

Sony

(SNE) - Get Report

, and

Toshiba

will offer faster speeds than those made by

Intel

(INTC) - Get Report

. IBM finished up 78 cents, 0.8%, to $95.50, while Sony was up 49 cents, or 1.4%, to $36.46.

Meanwhile, Bank of America analyst John Lau raised his 12-month stock price target for Intel to $26 from $24 on the belief that Intel will raise its fourth-quarter revenue forecast from its original range of $8.6 billion to $9.2 billion at its midquarter update on Dec. 2. Intel traded down 15 cents, or 0.7%, to $23.06.

Google

(GOOG) - Get Report

gained early after American Technology Research lifted its rating of the search-engine company to buy from hold. The firm also set a target price of $210 for Google, saying the company should be a core Internet holding, much like

eBay

(EBAY) - Get Report

and

Yahoo!

(YHOO)

. Google gained $1.66, or 0.9%, to $181.05.

OSI Pharmaceutical

(OSIP)

reported a loss of $260.4 million, or $6.50 per share, for the 2004 fiscal year, wider than the 2003 fiscal year loss of $181.4 million, or $4.87 per share. Revenue, however, rose 32% for the year to $42.8 million from $32.4 million a year earlier. OSI lost $2.53, or 5%, to $47.96.

Overseas markets closed mixed, with London's FTSE 100 up 0.2% to 4749 and Germany's Xetra DAX sliding 0.2% to 4146. In Asia, Japan's Nikkei rose 1.3% overnight to 10,978, while Hong Kong's Hang Seng gained 1.2% to 14,067.