Updated from 4:07 p.m. EDT

Stocks closed slightly lower Monday as mixed earnings news and relatively hawkish comments from Federal Reserve officials squelched buying after last week's big runup.

The Dow Jones Industrial Average lost 34.02 points, or 0.3%, to 11,185.68, and the S&P 500 was off 1.89 points, or 0.15%, to 1276.66. The Nasdaq Composite slipped 2.67 points, or 0.13%, to close at 2091.47. The Nasdaq received limited support from a 3.6% gain in Apple Computer ( AAPL).

For July, the Dow gained 35 points, or 0.3%, and the S&P 500 rose 6.5 points, or 0.5%. The Nasdaq dropped 80.5 points, or 3.7%.

"The market is waiting around for more economic data and earnings news," said Edgar Peters, chief market strategist with Pan Agora. "The jobs report is due on Friday, and the market will be sideways until then. There hasn't been any follow-through from Friday, but that may be because the advance was a little overdone."

About 1.62 billion shares changed hands on the New York Stock Exchange, with advancers matching decliners. Volume on the Nasdaq was 1.62 billion shares, with advancers outpacing decliners by an 8-to-7 margin.

The 10-year Treasury bond was up 1/32 in price to yield 4.99%, and the dollar was little changed against the euro and the yen.

While the economy is slowing, there's still a "50-50" chance of a quarter-point rate hike after the Federal Open Market Committee meets next Tuesday, with inflation risks tilted upward, St. Louis Federal Reserve President William Poole said Monday, Bloomberg reported. Poole is a nonvoting member of the FOMC.

Poole's bookmaking was more conservative than that of the fed-fund futures market, which had placed the odds of a rate hike at about 35% prior to his comments. Expectations that the Fed will lay off the tightening lever paced the stock market to sizable gains last week.

San Francisco Fed President Janet Yellen also spoke Monday about the U.S. economy. Yellen remarked that "the federal funds rate currently lies in a vicinity that is roughly appropriate for the Fed to attain its key objectives over the medium run," but that "the extent and timing of any additional firming should depend on how emerging developments affect the economic outlook."

The Dow is coming off its best week since late 2004 as several government reports suggested the U.S. economy has slowed enough to preclude the need for more rate hikes. For the five sessions, the Dow rose 3.2%, while the S&P 500 added 3.1% and the Nasdaq rose 3.7%.

Barry Hyman, equity market strategist with EKN Financial, said the Fed comments "bring up the worry of inflation again. The rally last week was built on the assumption of no more rate hikes. We do have a slowing economy with inflationary pressures, which is a dangerous scenario."

On the economic docket Monday was the Chicago Purchasing Managers' index for July, which unexpectedly rose to a reading of 57.9 from 56.5 in June. Analysts expected the index to dip to a reading of 56.0.

Oil firmed as conflicting signals continued to emanate from the Middle East on the prospects for a cease-fire between Israel and Hezbollah. Israel agreed to a 48-hour moratorium on bombing on Sunday after a raid in southern Lebanon killed more than 50 people, many of them women and children. In Nymex floor trading, September crude spiked $1.16 to close at $74.40 a barrel.

To view Gregg Greenberg's video take on today's market, click here .

Banc of America Securities upgraded Apple to buy from neutral. The firm also raised its price target to $79 from $68, citing strong demand for the company's MacBook and iPod MP3 player. Apple was higher by $2.37 to close at $67.96.

Henry McVey, chief U.S. investment strategist with Morgan Stanley, raised his recommended equity allocation to 70% from 65%. McVey reduced his bond weighting to 25% from 30% to account for the move, citing a better yield on stocks relative to bonds.

In other analyst actions, JPMorgan Chase upgraded Dow component Exxon Mobil ( XOM) to overweight from neutral, citing second-quarter results. Exxon climbed 74 cents, or 1.1%, to $67.74.

The firm also downgraded Chevron ( CVX) to neutral from overweight, citing valuation and the company's earnings miss late last week. Chevron gave back 27 cents, or 0.4%, to $65.78.

After the ratings moves and crude's advance, the Philadelphia Oil Service Sector Index gained 2.7% and the Amex Oil Index ended up 0.7%.

On Saturday, Wal-Mart ( WMT) said same-store sales rose 2.4% in July, up from June's 1.2% gain. July's rise was toward the high end of Wal-Mart's expected range for same-store sales growth of 1% to 3%. Wal-Mart tacked on 4 cents, or 0.1%, to $44.50.

Early Monday, Humana ( HUM) said second-quarter earnings rose 10% from a year ago to $89.5 million, or 53 cents a share, wiping out estimates for 35 cents a share. The health insurer also reiterated full-year profit guidance. Humana gained $4.39, or 8.5%, to $55.93.

Tyson Foods ( TSN) dropped 2.9% after posting a fiscal third-quarter net loss of $52 million, or 15 cents a share, compared with a profit of $131 million, or 36 cents a share, last year. Analysts expected a loss of 3 cents a share, according to Thomson First Call. Tyson also offered weak full-year guidance, sending the stock down 42 cents to $14.15.

Earnings from Chipotle ( CMG) and Whole Foods ( WFMI) are expected after the bell.

SanDisk ( SNDK) will exchange $1.5 billion of stock for fellow flash memory supplier Msystems ( FLSH). At about $35.99 an Msystems share, the price is a 13% premium to Friday's close.

SanDisk finished down 48 cents, or 1%, to $46.66. Msystems surged by $4.21, or 13.2%, to $36.

Late Friday, Pfizer ( PFE) said CEO Hank McKinnell will cede his post to Vice Chairman Jeffrey Kindler and retire ahead of schedule. McKinnell has presided over a 37% decline in the drug company's shares during his five years at the helm. Pfizer dipped 12 cents, or 0.5%, to $25.99.

Overseas markets ended mixed, with London's FTSE 100 down 0.8% to 5928 and Germany's Xetra DAX off 0.4% to 5682. In Asia, Japan's Nikkei rose 0.8% overnight to 15,457, and Hong Kong's Hang Seng edged up 0.1% to 16,971.

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