In any offensive -- be it war, football, or trying to make money in the stock market -- if leaders falter, chaos ensues.

Monday's session had all the signature sloppiness of a wandering market. The Dow Jones Industrial Average briefly dipped into negative territory year to date, but came out of the hole to end down 0.7% for the day, closing at 12,477.16 vs. its intraday low of 12,450.89.

The S&P 500 finished down 0.5%, closing at 1422.95, and the Nasdaq Composite slipped 0.8% Monday to finish at 2431.07.

The Dow is now up only 0.1% in 2007, the S&P has returned 0.3% and the Nasdaq, after eating away at its year-to-date returns in the past week, remains up 0.6% thus far.

Anxiety about earnings season, combined with the oil and energy selloff, has left many large-cap stocks in the red for the year.

Within several industry groups, the leaders by market cap are posting negative returns thus far in 2007 (see table below).

"That makes for a lot of people's balloons deflating," says Margaret Patel, portfolio manager at Pioneer Investments, which has $6 billion in assets under management.

"Something with a market cap of $40 million may be breaking your heart, but it doesn't even make the paper. Those large-cap names can jostle people."

To the list below, add household names like Home Depot ( HD), Apple ( AAPL), Intel ( INTC), Motorola ( MOT) and Pfizer ( PFE).

They may not be down on the year, but each is dealing with regulatory investigations and/or providing cautious earnings guidance. Meanwhile, IBM ( IBM) crawled back to break-even for the year thanks to Monday's 1% rise.

Company Industry Market Cap YTD performance (%)
Exxon Mobil (XOM:NYSE) Integrated oil & gas $428.9 bln -4.70%
United Parcel Service (UPS:NYSE) Air delivery & freight $80.5 bln -1%
Caterpillar (CAT:NYSE) Farm & construction machinery $38.6 bln -4.90%
Cisco Systems (CSCO:Nasdaq) Network & communication devices $162.1 bln -2.90%
General Electric (GE:NYSE) Conglomerates $380.9 bln -1.20%
AT&T (T:NYSE) Domestic telecom services $134.8 bln -1.80%
UnitedHealth Group (UNH:NYSE) Health Care Plans $71.4 bln -2.80%
eBay (EBAY:Nasdaq) Internet software & services $41.3 bln -2.50%
Advantest (ATE:NYSE) Semiconductor equipment & materials $41.8 bln -11%
Boeing (BA:NYSE) Aerospace/Defense $67.5 bln -3.40%
Source: Yahoo! Finance

It's enough for many to say "let's get out of the way of this right now," says Art Hogan, chief market analyst at Jefferies & Co.

But, most telling about the list nearby may be what groups and names are not on it.

The brokers and other financial companies are still faring well, which is a sign that all is not lost, as Jim Cramer notes on Goldman Sachs ( GS) leads the domestic brokers with a $94.7 billion market cap. It is still up 6.7% thus far this year. Cramer also points investors in the direction of stocks that are turning up, including consumer staples General Mills ( GIS), Kellogg ( K), Hershey ( HSY) and Kimberly Clark ( KMB).

State of Disunion

Neither post-close results from Texas Instruments ( TXN) nor President Bush's State of the Union Address Tuesday night are likely to shake traders out of their earnings-based stupor. The issues that surrounded the change of command in Washington during the midterm elections still linger, but so does the gridlock that ensued. Traders say Federal Reserve Chairman Ben Bernanke would present a greater risk to the markets than what Bush saysTuesday.

"Ostensibly, surprises could be to the upside," says Jefferies' Hogan, citing Bush's low approval rating.

On specific issues, many analysts believe Bush is likely to address America's "addiction to oil" -- a comment he made last January that sent alternative energy stocks soaring. A nod to these initiatives could revive some of those alternative energy plays, as reported here .

"Alternative energy was thrown in with oil's bath water," says Hogan, referring to the recent decline in oil prices and oil stocks. Oil moved up initially Monday, but fell again midday to close down 1.5% at $52.58 per barrel. Traditional energy stocks were mixed in reaction but alternative energy stocks such as Pacific Ethanol ( PEIX) and Verasun Energy ( VSE) were big winners again.

Patel believes the only potential market-moving comment could come on the topic of health care, specifically for health care technology and information systems. Bush addressed health care inefficiencies in last year's State of the Union, and may do so again. The topic is a safe way to discuss health care -- who can argue with more efficiency?

Stocks such as Eclipsys ( ECLP), McKesson ( MCK) and Cerner ( CERN) could benefit.

Ultimately, Tuesday's speech lacks the heft of prior State of the Union addresses. So many politicians have tossed their hats into the ring for the 2008 presidential election that investors already have turned their attention to what's next.

Likewise, investors turned the page in their favorite Goldilocks tale to find it blank when it comes to what will drive the markets. Corporate executives are shying away from making any promises about future earnings, leaving investors unsettled. Also, the economy is not expected to accelerate at the same pace as in the fourth quarter, even with a possible housing market recovery. So, as investors take some profits and cushion their portfolios, the market feels the drain from its deepest wells.

But more buyers aren't far behind. "Some of these tech names are moving into the value zone," says Patel, with a spark of interest in her voice. Surely, she's not alone.
In keeping with TSC's editorial policy, Rappaport doesn't own or short individual stocks. She also doesn't invest in hedge funds or other private investment partnerships. She appreciates your feedback. Click here to send her an email.

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