Stocks Finish Mixed After Volatile Session

Stocks recovered from earlier losses to finish flat Monday in a volatile session riddled with weak economic data, big auto-sales declines and concerns about more fallout from the housing slump.

The Dow Jones Industrial Average finished a few points lower, after being down about 100 points just one hour before the closing bell. The tech-heavy Nasdaq also closed a few points lower, while the S&P 500 index just barely crossed the line to close in positive territory.

Financials led decliners in the S&P 500 index. Mortgage lender Thornburg Mortgage said it has failed to meet a surge in margin calls, raising concern that the jumbo mortgage lender might file for bankruptcy.

Shares of Bank of America , the largest U.S. bank by market value, declined after Countrywide Financial , which agreed to be purchased by Bank of America for about $4 billion, said it may record more credit losses as delinquency rates increase.

Several firms slashed their price targets and earnings outlooks for brokerage firms, including Bear Stearns , Goldman Sachs and Lehman Brothers .

Bank of America and RBC cut their price targets on Apple , citing lower estimates for sales of iPhones and iPods amid weak consumer spending, but kept their "buy" and "outperform" ratings, respectively.

Apple's shareholder meeting is scheduled for Tuesday.

Elsewhere in the tech sector, Piper Jaffray cut its rating on the Internet sector to "neutral" from "positive," saying that earnings estimates are at risk.

Google , which has lost a third of its value in 2008, dropped about 4 percent Monday as analysts noted the stock is rapidly approaching its 52-week low of $437.

The market has made some attempts at rallying today, with little conviction. Some analysts say we may have already seen the bottom of this downturn but Brian Gendreau, investment strategist for ING Investment Management, isn’t convinced. “I don’t think there’s been complete capitulation yet,” Gendreau said.

Right now, the market is just looking for good news, Gendreau said, though it’s not clear what that will be. “It’s not gonna be the Fed,” Gendreau said, adding that the market has already priced in 2 percent interest rates by May. “It may be the next earnings season,” Gendreau said, “if earnings reports come in still stronger than priced in.”

Gendreau, like many analysts, says there are some bargains to be had in the technology and health-care sectors, as well as among exporters.

Earlier, Philadelphia Federal Reserve President Charles Plosser sent a little shiver through the market when he said that U.S. financial turmoil is enough for the Fed to lower interest rates but the central bank should be ready to begin raising interest rates when the economy stabilizes.

Perennial bull Ed Yardeni also kicked up some dust when he wrote, in a note to clients, that the business cycle has already peaked and February was probably the first month of recession.

Boeing was the top decliner on the Dow after the company lost a $40 million U.S. Air Force contract to rival aircraft maker EADS and its U.S. partner, Northrop Grumman . The contract, to build military refueling planes, was one of the biggest Pentagon contracts in decades.

Energy stocks advanced after crude oil hit another high, topping out at $103.95 a barrel, before settling at $102.45 a barrel. ExxonMobil and Chevron were among the Dow's advancers.

Auto makers declined after General Motors and Ford Motor reported double-digit U.S. sales declines and both cut second-quarter production.

GM, the No. 1 U.S. auto maker by sales , reported February sales fell an adjusted 16 percent, in line with analysts' projections. Without an adjustment for the number of selling days, GM sales were down about 13 percent. A lot of that came from a more than 22 percent drop in light truck sales, reflecting the fact that consumers are moving away from trucks and big gas-guzzling SUVs as gasoline prices surge. GM car sales declined 5.2 percent. GM also said it would cut second-quarter production by 5 percent.

Earlier, Citigroup cut its rating on General Motors to "sell" from "hold."

Ford