Updated from 4:23 p.m. EDTStocks in New York struggled Monday and ended little changed as traders turned cautious at the start of the first busy week on the earnings front. The Dow Jones Industrial Average was down 22.28 points, or 0.16%, at 14,043.73, and the S&P 500 lost 5.01 points, or 0.32%, at 1552.58. The Nasdaq Composite tacked on 7.05 points, or 0.25%, to 2787.37, with strength provided by Google ( GOOG), which topped the $600 level for the first time. Of the Dow's 30 components, Hewlett-Packard ( HPQ) was the best performer, climbing 2.2%. On the other hand, ExxonMobil ( XOM) was one of the worst, falling 0.7% as oil prices plummeted $2.20 to $79.02 a barrel. "This was a small pullback when compared to the move last week," said Edgar Peters, chief market strategist with Pan Agora. "We had a little bad news, and investors took profits. There wasn't much to move the market, so the decline in oil had a lot of oil companies dropping off and that hurt." Breadth was poor. On the New York Stock Exchange 2.03 billion shares changed hands, as decliners topped advancers by a 2-to-1 margin. Volume on the Nasdaq reached 1.51 billion shares, with losers outpacing winners nearly 3 to 2. Last time out, a stronger-than-expected September jobs report helped the major averages close the week with gains. The Dow rose 91.70 points, or 0.66%, to 14,066.01, having touched a record intraday high of 14,124.54. The S&P 500 added 14.75 points, or 0.96%, to 1557.59, an all-time closing high. The Nasdaq surged 46.75 points, or 1.71%, to 2780.32. The indices notched their fourth winning week in a row.
Traders, though, were nervous ahead of the earnings reporting season, which unofficially kicks off Tuesday when Dow component Alcoa ( AA) posts its results. The earnings calendar was light to start the week, however, with Yum! Brands ( YUM) the only S&P 500 company due out with results. "The market is at high levels, so this is a perfect day for investors to step aside and let the market digest," said Peter Cardillo, chief market economist with Avalon Partners. "Earnings won't really pour in until next week, so we'll maintain this cautious attitude through this week." Meanwhile, there were several mergers in the spotlight. German database firm SAP ( SAP) said over the weekend that it will acquire French software maker Business Objects ( BOBJ) for $6.8 billion in cash. SAP lost $2.87, or 4.9%, to $56.36. Business Objects, on the other hand, rallied 15% to $57.83. In other M&A activity, United Industrial ( UIC) advanced 6.3% to $80.39 after Textron ( TXT) set plans to purchase the maker of unmanned aircraft for almost $1.1 billion. Textron shed 2.1% to end at $64.01. Elsewhere, Vodafone ( VOD) said it will buy the Italian and Spanish assets of Tele2 AB for more than $1 billion. Vodafone finished down 39 cents, or 1.1%, to $34.58. Among ratings changes, JPMorgan downgraded Merrill Lynch ( MER) to neutral from overweight after the financial-services company said last week it expects $5 billion in writedowns due to the credit crisis over the summer. Shares of Merrill slid $2.55, or 3.3%, to $74.12.
Deutsche Securities cut its ratings on several companies in the real estate sector. Kimco Realty ( KIM), Avalon Bay ( AVB), Boston Properties ( BXP) and Public Storage ( PSA) all were downgraded to hold from buy. Shares of each were down between 1.4% and 3.3%. Away from stocks, precious metals were also lower. Gold lost $8.50 to $738.70 an ounce, and silver eased 12 cents to $13.36 an ounce. Due to the Columbus Day holiday, bond markets were closed in the U.S. and the economic docket was bare. European bourses were mimicking the sluggish action of the U.S. averages. London's FTSE 100, Germany's Xetra Dax and the Paris CAC 40 lost 0.2% or more. Overnight in Asia, Hong Kong's Hang Seng slipped 0.2%, while China's CSI 300 Index jumped 1.3%. Japan's Nikkei 225 Index was closed.