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Tough Day for Tech

The Nasdaq slides 0.9%. The Dow and S&P are also lower.

Updated from 4:14 p.m. EDT

Stocks had a seesaw session Monday but ultimately closed to the downside on the first trading day of the fourth quarter.


Dow Jones Industrial Average

lost 8.72 points, or 0.07%, to 11,670.35, having briefly traded above its record closing high of 11,722.98, set on Jan. 14, 2000. The

S&P 500

was off 4.53 points, or 0.34%, at 1331.32, and the

Nasdaq Composite

dropped 20.83 points, or 0.92%, to 2237.60.

Advances of 1.4% or more in components


(HPQ) - Get HP Inc. (HPQ) Report



(BA) - Get Boeing Company Report

helped minimize the Dow's losses.

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Marc Pado, U.S. market strategist with Cantor Fitzgerald, said the market's recent action "suggests that funds had set their positions for the end of the quarter and their fiscal year. This does not mean we should see a reversal of fortunes just because the quarter is over. Expectations are for another quarter of double-digit growth."

Volume was light to begin the last quarter of the year. About 2.03 billion shares changed hands on the

New York Stock Exchange

, and decliners edged advancers by a 6-to-5 margin. Volume on the Nasdaq was 1.79 billion shares, and losers beat winners 2-to-1.

Falling oil prices failed to buoy the major indices. Crude futures declined despite oil export reductions that will attempt to reverse falling prices. Late Friday, Venezuela said it will cut oil output by 50,000 barrels a day, and Nigeria said Saturday that it will cut exports by 5%.

Oil lost $1.88 to close at $61.03 a barrel. Elsewhere, gold reversed its early gains and finished down 90 cents to $603.30 an ounce. Silver added 10 cents to $11.64 an ounce.

To view Farnoosh Torabi's video take on today's market, click here

Last week, the Dow tried, but failed, to establish a record high. The Dow entered Friday's session just 5 points from its best-ever finish, but when the closing bell rang, it had dropped 39.38 points, leaving it roughly 44 points shy of the January 2000 top mark.

Still, September, normally a weak month for stocks, was good overall. The Dow rose 298 points, or 2.6%, the S&P 500 gained 32 points, or 2.5%, and the Nasdaq tacked on 75 points, or 3.4%. The market also had its best quarterly performance since the last quarter of 2004.

"The normally weakest period has been strong," said Paul Nolte, director of investments with Hinsdale Associates. "We could see the normally strong period be weak. We anticipate that the changing markets are beginning to favor the largest stocks, maybe as a defensive measure to a weaker economic backdrop."

Wall Street had little reaction to the day's economic releases. The Institute for Supply Management said its manufacturing index for September fell to 52.9, down from 54.5 in August and slightly below the consensus expectation of 53.5.

Ian Shepherdson, chief economist with High Frequency Economics, said the ISM report "seems to validate the message from the very soft Philly Fed and contradict the strong Chicago PMI, but the details are a bit more complicated. This suggests there is no real momentum behind the dip in the headline yet, and it is unlikely to fall further next month."

Also on the economic docket, the Commerce Department said construction spending unexpectedly rose 0.3% in August. Spending was expected to have eased 0.1% after falling 1.2% in July.

After the release of the data, Treasuries turned higher, with the benchmark 10-year note up 4/32 in price to lower the yield to 4.61%. The dollar weakened against the world's other major currencies.

Mergers and talk of takeovers grabbed the headlines, including one in the biotech sector, where

Gilead Sciences

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said it would acquire



for $52.50 a share, or $2.5 billion. Myogen jumped 46.6% to close at $51.44.


Harrah's Entertainment


received a buyout proposal from two private equity firms that would value the casino operator at $81 a share. Harrah's said its board formed a special committee to examine the offer, and its shares surged 13.9% to $75.68.

Among Harrah's rivals,

Boyd Gaming

(BYD) - Get Boyd Gaming Corporation Report

closed higher by 5.5%,

MGM Mirage

(MGM) - Get MGM Resorts International (MGM) Report

gained 3% and

Wynn Resorts

(WYNN) - Get Wynn Resorts, Limited (WYNN) Report

tacked on 1.1%.

The world's biggest retailer,


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, said this weekend that same-store sales rose 1.8% in September, toward the lower end of its prior forecast. The company had projected year-over-year growth of 1% to 3% at stores open for more than a year. Shares slumped 88 cents, or 1.8%, to $48.44.

Staying in the retail group,

Pier 1

(PIR) - Get Pier 1 Imports, Inc. Report

said that Marvin Girouard, its chairman and chief executive, plans to retire from his posts at the end of next February. Pier 1 added 32 cents, or 4.3%, to $7.74.

Among analyst moves, Citigroup cut its rating for

Apple Computer

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to hold from buy, saying it believes the company won't beat revenue targets for the third or fourth quarter. Apple lost $2.12, or 2.8%, to finish at $74.86.

Overseas, Europe's equities edged lower. London's FTSE 100 was off 0.1% to 5958, and Frankfurt's Xetra DAX eased 0.1% to 5999. Asia's shares inched higher, with Tokyo's Nikkei ending up 0.8% to 16,254. Hong Kong markets were closed for a holiday.