Indeed, tech stocks were among the day's worst performers, with the Nasdaq holding firmly below Friday's close. Yahoo , Apple and ADRs of Research In Motion all declined.
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Bank stocks also took a beating, with financials logging the biggest decline among 10 key S&P sector indexes. Lehman Brothers , Wachovia and ADRs of UBS were among the sector's biggest decliners.
Oil pared its gains slightly, trading around $140 to $141 a barrel around the opening bell, as the dollar remained weak and tensions between Israel and Iran fueled anxiety.
The Chicago Federal Reserve reported that its gauge of Midwest business activity contracted in June, the fifth straight month of decline, but the drop was less severe than expected. Manufacturing in the Texas area slowed in June.
The Chicago and Dallas reports are the last regional reports ahead of the national manufacturing reading from the ISM, due out on Tuesday. Among the other closely-watched regional reports, manufacturing activity in the Philadelphia area and New York regionslowed more than expected.
It's a shortened trading week due to the Fourth of July holiday on Friday but the week is big on data. Due out on Thursday is the June jobs report.
The current economic downturn is also hitting the wealthy according to a new CNBC/Portfolio.com “Wealth in America” report, spelling more gloom for the consumer sector.
Americans are driving less, entertaining less, vacationing less and spending less on groceries, according to the report conducted for CNBC and Portfolio magazine.
General Motors shares , already hovering at a more than 50-year low, slipped further ahead of June U.S. sales reports from major auto makers, due out on Tuesday. This will be one of the most closely watched reports: It may be the month that Toyota eclipses GMas the leader in U.S. auto sales.
Investors sold off MBIA amid reports that it had sold municipal bonds to raise cash. MBIA shot back to defend itself.
"Contrary to recent statements in the media, MBIA is not in a 'tenuous situation'," said C. Edward "Chuck" Chaplin, the firm's finance chief. "The holders of our insurance policies, GICs, medium-term notes and other debt instruments can rest assured that MBIA will meet its obligations to them as it always has -- on time and in full," he said.
In an otherwise quiet day for earnings reports, H&R Block, the nation's No. 1 tax preparer, said it swung to a quarterly profitfrom a loss a year earlier as the weak dollar helped the company cash in on exchange rates from its business in Canada. The results beat expectations -- H&R Block posted a profit of $2.11 a share, ahead of analyst estimates of $2.03 -- as did the company's guidance.
Wal-Mart Stores said Sunday the company will begin replacing logos on the front of its U.S. stores with a new design beginning this fall.
The revamped logo comes as Wal-Mart continues to tweak its image after facing criticism from union-led groups and local communities across the nation opposed to big-box store developments.
General Electric shares ticked higher after Lehman Brothers' Robert Cornell said GE shares "could be near a bottom," citing the fact that, historically, GE tends to trough at a 25 percent discount to the S&P 500 and are currently at 18 percent.
ArcelorMittal Chairman and CEO Lakshmi Mittal is looking at entering the takeover battle for the Rio Tinto mining group, the Financial Times reported on Monday, quoting people familiar with the situation.
Mittal, main shareholder at ArcelorMittal, was keen to secure larger supplies of iron ore, said the newspaper.
Also, eBay suffered another legal blow as a court in France ordered the online auction service to pay $61 million to luxury goods group LVMH for allowing sales of counterfeit items on the site.
Asian stocks closed mostly lower, with skyrocketing oil prices remaining the key theme, while in Europe, shares closed higher, buoyed by energy stocks, but ended the first half down 20 percent as surging crude prices have raised inflation worries. Euro-zone inflation came in at a record 4 percent for June, according to initial estimates.
MONDAY: H&R Block earnings after the bell
TUESDAY: Auto sales; ISM manufacturing index; construction spending; Fed's Lockhart speaks; Earnings from Constellation Brands, Apollo Group
WEDNESDAY: Weekly mortgage applications; factory orders; crude inventories; earnings from Family Dollar
THURSDAY: Jobless claims, Jobs report, ISM services index; Stock market closes at 1pm ET and bond market closes at 2pm ET
FRIDAY: All major U.S. markets closed for Fourth of July holiday
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