On Monday afternoon, the dow fell because of investors concerns about the economic recovery and Europe's debt problems.
The Dow Jones industrial average (INDU) lost 40 points, or 0.4%, with over 2-1/2 hours left left in the session. The S&P 500 index (SPX) lost 2 point, or 0.2%. The Nasdaq composite (COMP) was little changed.
The major indexes have slipped for four weeks in a row as the optimism that fueled a 10-month rally off of 12-year lows hit last March has been replaced by cautiousness. Bets that an economic recovery was brewing -- combined with trillions in fiscal and monetary stimulus -- fed the 2009 rally.
But so far in 2010, markets have been choppy and weak as investors wait for evidence that the still-germinating recovery is really taking hold, particularly amid hard-hit labor market and housing industry. Last Thursday, the Dow fell below the 10,000 level -- a key psychological barrier -- for the first time in three months.
In January worries about China curbing bank lending and the U.S. White House limiting trading at big banks raised fears about tighter lending standards and the credit markets.
Stocks tumbled toward the end of last week on fears that Greece might default on its debt, which could trigger defaults in other European nations, including Portugal, Ireland, Italy and Spain. But some of the selling washed out by late Friday, suggesting the knee-jerk reaction had passed.
Helping to take the edge off the selling Monday was a rally in commodity prices and energy and metal stocks as the dollar lost some steam.
Last week, debt concerns battered the euro, propelling the dollar and dragging on dollar-traded commodities. A wish to dump riskier assets including U.S. stocks also added to the selling.
Commodities and the dollar: The U.S. dollar slipped versus the euro after rising to a more than six-month high versus the European currency last week. The dollar strengthened versus the Japanese yen.
Over the weekend, finance ministers from the Group of Seven largest industrialized nations pledged to keep providing liquidity to sustain a recovery. But the issue of Greece's potential default was not specifically addressed.
Commodity prices rallied, with COMEX gold for April delivery rising $14.60 to $1,066.80 an ounce.
U.S. light crude oil for March delivery rose 73 cents to $71.92 a barrel on the New York Mercantile Exchange.
On the move: A number of tech stocks gained, including Hewlett-Packard (HPQ, Fortune 500), Intel (INTC, Fortune 500), Google (GOOG, Fortune 500) and Cisco Systems (CSCO, Fortune 500).
Home Depot (HD, Fortune 500) gained after Morgan Stanley reportedly upgraded the Dow component to "overweight" from "equal-weight," saying it will benefit from a recovering housing market.
But a variety of financial shares gained, dragging on the market. Bank of America (BAC, Fortune 500), JPMorgan Chase (JPM, Fortune 500), Goldman Sachs (GS, Fortune 500) and Wells Fargo (WFC, Fortune 500) were among the big losers.
Market breadth was negative. On the New York Stock Exchange, losers topped winners four to three on volume of 480 million shares. On the Nasdaq, advancers beat decliners on volume of 1.06 billion shares.
After the gold rush
Corporate news: Former Merrill Lynch CEO John Thain will run struggling small business lender CIT Group (CIT, Fortune 500), the company said over the weekend. Thain ran Merrill until it was sold to Bank of America in September 2008, at the height of the financial crisis.
CIT emerged from bankruptcy in December. Shares gained 2% Monday morning.
Toyota Motor (TM), reeling from the recall of more than 8 million vehicles due to brake problems, told its dealers it is close to announcing a solution to the problems with the Prius hybrid Sedan.
Quarterly results: A few big corporations are due to report results this week, including Dow components Coca-Cola (KO, Fortune 500) and Walt Disney (DIS, Fortune 500) on Tuesday and Sprint Nextel (S, Fortune 500) on Wednesday.
Coke is expected to have earned 66 cents per share up from 64 cents a year ago, according to a consensus of economists surveyed by earnings tracker Thomson Reuters. Disney is expected to have earned 39 cents per share, down from 41 a year ago. Sprint Nextel is expected to have lost 19 cents per share after earning 24 cents per share a year ago.
With 320 companies, or 64% of the S&P 500, having reported results, earnings are on track to have risen 207% versus a year ago and revenues to have gained 8%. But the big jump year-over-year is partly due to easy comparisons to a tough fourth-quarter of 2008.
Financial companies in particular are driving the gains. Stripping out financials leaves earnings growth at 16% and revenue growth at 3%.
Results have largely been positive, with 74% of companies beating earnings forecasts and 70% beating revenue forecasts.
World markets: European markets ended higher, with the London FTSE gaining 0.6%. Asian markets ended lower Monday.
Bonds: Treasury prices rose, lowering the yield on the 10-year note to 3.59% from 3.61% late Friday. Treasury prices and yields move in opposite directions.
Source: CNN
