Updated from 4:11 p.m. EST
Dow Jones Industrial Average
closed below 13,000 and tech stocks were punished yet again as Wall Street fell victim to late selling pressure Monday.
Earlier, gains in banks, retailers and transports offset weakness in oil and gas names to send blue-chips higher, but the upward momentum faded in the final hour.
At the close, the Dow had a loss of 55.44 points, or 0.43%, to 12,987.30 -- the first time the index has closed below the 13,000 level since mid-August. The
fell 14.52 points, or 1%, to 1439.18.
In what has been a trend of late, the tech-heavy
saw the steepest declines. This time, the index was lower by 43.81 points, or 1.67%, at 2584.13.
Pressuring the Nasdaq were losses in
Research In Motion
of 10% and 9.4%, respectively.
Also on the losing side, the Philadelphia Gold and Silver Sector Index dropped 7.7%, and the Philadelphia Oil Service Sector Index sank 5.9%. Those moves came as crude slid $1.70 to $94.62 a barrel, gold tumbled $27 to $807.70 an ounce and silver slid 78 cents to $14.76 an ounce.
The strongest subgroup measure was the Amex Airline Index, which jumped 4.7%. Elsewhere, the KBW Bank Index climbed 1.1%, and the S&P Retail Index rose 1%.
"It was a thinly traded day, and even though we finished lower, it wasn't really disastrous," said Larry Wachtel, senior market analyst with Wachovia Securities.
"There was really a dichotomy with the losers of the last few weeks performing well today and vice versa," he added. "This wasn't a full-blown selloff like Friday, and given the fact it was a quasi-holiday, you can't read much into today. People are still tentative, though."
The major averages entered the day having notched a second losing week in a row, culminated by a sharp decline in the final hour of trading Friday. Over the five sessions last week, the Dow lost 4%, and the S&P was down 3.8%. The Nasdaq suffered the most, tumbling more than 6.5%.
Breadth was weak to start the week. On the
New York Stock Exchange
3.75 billion shares changed hands, as decliners toppled advancers by a 2-to-1 margin. Volume on the Nasdaq reached 2.73 billion shares, with losers beating winners 3 to 2.
Paul Nolte, director of investments with Hinsdale Associates, said that the market is due for a bounce, as market internals are near levels that usually jump-start a short-term rally.
"Either the market is setting up for a successful retest of the August lows or it will be a dismal failure and we begin a journey into a new bear market," Nolte said. "However, unlike past instances of buying the dips, we are getting to the point of selling rallies as many of our longer-term models point to generally lower stock prices ahead."
Financial stocks, which were battered in the wake of more writedowns due to the recent credit market woes, got some positive news to start the week. The
New York Times
reported that a structure for a $75 billion backstop fund from
Bank of America
has been struck.
The same news outlet has also reported that potential bids for restaurant chain
could be in jeopardy due to the credit crunch. Still, Wendy's closed higher by 36 cents, or 1.2%, at $31.60.
The earnings docket was light to open the week, with
the only S&P 500 company on tap. Tyson swung to a fiscal fourth-quarter profit of 9 cents a share, compared with a loss of 17 cents a year ago. However, both earnings and guidance fell short of Wall Street's estimates, and shares fell 42 cents, or 2.9%, to end at $14.33.
Several brokers were out with ratings changes. Lehman Brothers downgraded both
to equal-weight from overweight. Fannie Mae lost 4% to $47.06, and Freddie Mac slumped 4.1% to close at $40.
spiraled 58.7% lower after Citigroup downgraded the financial company's stock to sell from hold. The firm cited E*Trade's announcement after the previous session of larger-than-expected writedowns.
Merrill Lynch downgraded many of the enterprise software names. Among those, the firm cut its rating for
to neutral from buy.
were also cut.
Among upgrades, Citigroup raised its rating for chipmaker
to buy from hold. However, the stock was off 4 cents, or 0.2%, to $18.88.
The U.S. bond market was closed in observance of the Veterans Day holiday. Additionally, there were no economic releases scheduled.
Overseas markets were mostly lower. In Asia, Hong Kong's Hang Seng dropped 3.9% and Japan's Nikkei 225 declined 2.5%. Among European bourses, London's FTSE 100 added 0.5%, while Germany's Xetra Dax slipped 0.1%.
Action should pick up Tuesday, with a report on pending home sales, as well as earnings from retailers
, due before the opening bell.