NEW YORK ( TheStreet) -- Stocks finished on a mixed note Monday as investors weighed Federal Reserve Chairman Ben Bernanke's gloomy economic outlook against expectations for a speedy resolution of the tax cuts debate in Washington.

The Dow Jones Industrial Average stuck to a tight trading range of a little more than 40 points for the session. After briefly turning positive late in the day, the blue-chip index closed 20 points lower, or 0.2%, at 11,362. The S&P 500 slipped nearly 2 points to 1223, while the Nasdaq Composite rose 4 points, or 0.1%, to 2595.

Meanwhile, commodities surged, with gold rising to a new record and silver vaulting to a 30-year high.

Financial stocks were weak on Monday while the energy and basic material sectors were pockets of strength.

Breadth was largely negative for the Dow with 20 of the index's 30 components losing ground. Bank of America ( BAC) was the biggest blue-chip laggard, sliding nearly 2%. Cisco Systems ( CSCO) was the biggest percentage gainer within the Dow after the stock was upgraded to outperform from perform at Oppenheimer. Other components on the rise included Pfizer ( PFE), JPMorgan Chase ( JPM) and Boeing ( BA).

"The equity market had a very nice run last week, and I think the market is experiencing some technical resistance, but there's a growing perception that we're going to get something from Washington either today or tomorrow," said Michael Strauss, chief economist and market strategist at Commonfund.

Over the weekend, Republicans and Democrats neared a deal that would temporarily extend Bush-era tax rates for all income brackets in exchange for an extension of jobless benefits for millions of unemployed Americans.

"The president is confident that, within the next couple of days or so, we will find a way to extend tax cuts for middle-class families and do some other things that the president thinks are important in helping grow the economy and create jobs," White House Spokesman Bill Burton said on Monday.

Also over the weekend, Bernanke presented a dour view of the U.S. economy in an interview on CBS' "60 Minutes," saying that "it could be four, five years before we are back to a more normal unemployment rate, somewhere in the vicinity of say 5% or 6%."

In the same interview, Bernanke acknowledged that an expansion of the central bank's $600 billion bond purchase program was a "possibility" that would depend on the plan's efficacy and inflation. Bernanke also sought to minimize concerns about inflation saying that the Fed's careful monitoring of the situation would ensure that it doesn't climb above 2%.

"There hasn't really been that much movement today in the markets." Strauss said. "I think Bernanke's comments were more along the lines of: If the economy grows more than 3%, then the Fed will end the program early. And I think that was the perception that most people had, but hearing it from Bernanke's mouth added a little more credibility to the Fed's sensitivity and using it as a dialing up, dialing down tool."

Eurozone concerns persisted as European Union finance ministers come together late Monday in Brussels to discuss whether its €750 billion ($996.3 billion) rescue package will be sufficient to address sovereign debt weakness. The euro lost ground against the dollar, falling to $1.3271 from $1.3411. The FTSE in London added 0.4% and the DAX in Frankfurt inched 0.1% higher. Hong Kong's Hang Seng shed 0.4%, and Japan's Nikkei dropped 0.1%.

There are no economic reports scheduled for release during Monday's session.

Meanwhile, the Treasury Department said late Monday that it plans to sell 2.4 billion shares of Citigroup's ( C) stock as it prepares to exit its position in the bank. Shares were down 1.1% in extended trading.

Shares of Pfizer gained 0.5% to $16.81 after CEO Jeffrey Kindler unexpectedly announced his retirement, citing the exhausting demands of the job. Pfizer's board selected Ian Read, who has headed the company's global biopharmaceutical operations, as CEO, president and a member of the board.

Drug developer Celgene ( CELG) saw its stock slump 8.2% to $55.64 as new but inconclusive data suggested multiple myeloma patients treated with the Revlimied, its popular blood cancer drug, for extended periods of time are being diagnosed with secondary cancers at a higher rate than patients not treated with Revlimid.

Sprint Nextel ( S) saw its stock jump 6.4% to $4.17 after hedge fund titan David Einhorn said he was long the stock and that Sprint was poised for a turnaround. Separately, the company announced its plan to consolidate its multiple network technologies into a single network. The company expects the plan to enhance service, improve network flexibility and reduce operating costs.

Hedge fund manager Bill Ackman is interested in funding Borders ( BGP) in a bid to buy rival Barnes & Noble ( BKS), according to a filing on Monday. Barnes & Noble's stock jumped 10% to $14.73, while shares of Borders surged 29% higher to $1.39.

Australian miner Riversdale Mining said it has been approached by Rio Tinto ( RIO) about a takeover offer of 15 Australian dollars a share ($14.81), or $3.5 billion. Rio's stock rose 0.3% at $70.34.

Dollar General ( DG) shed 7.3% to $30.94 after its profits grew more slowly than expected.

Dryships ( DRYS)shares pushed higher by 5.7% to $6.21 amid heavy trading after the drybulk shipper said Friday its offshore drilling subsidiary plans to raise $500 million in a private offering.

Shares of First BanCorp ( FBP) soared 13.5% to $0.30 after the company's management rejected an unsolicited buyout offer from Doral Financial ( DRL) which is also headquartered in San Juan.

Kraft ( KFT) is suing Starbucks ( SBUX) to obtain a preliminary injunction to stop the coffee chain from violating a distribution agreement . Shares of Kraft were off by 0.1% at $30.20, while the stock of Starbucks were unchanged at $32.72.

In commodity markets, the January crude oil contract rose 19 cents to settle at $89.38 a barrel. The most actively traded February gold contract was up by $9.90 to settle at $1,415.60 an ounce, giving up some of its earlier gains.

The dollar traded higher against a basket of currencies, with the dollar index up by 0.3%; the benchmark 10-year Treasury note strengthened 21/32, diluting the yield to 2.931%.


--Written by Melinda Peer and Shanthi Bharatwaj in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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