Dow Ticks Higher but Banks, Techs Skid

The Dow industrials moved higher, looking to end a dismal quarter on an upbeat note, after dancing in and out of bear-market territory earlier in the session.

After breaking through its March low last week, the Dow has been unable to commit to bear-market territory, capitulation or a rebound, and trading volume is thin. The whole market is in a kind of limbo: While major indexes revisit March lows, small- and mid-cap stocks are well off their March lows.

"I think that the market is in a secular bear market," Steven Lehman, a fund manager for Federated Market Opportunity Fund, told CNBC. "This was not a normal cycle –- It was a Golden Era built mainly on debt ... the Golden Era is over but the debt remains," Lehman said.

"Economic and earnings disappointments lie ahead at a time when equity valuations are very high," Lehman said.

Lehman is currently long on gold and short technology and emerging markets.

"I think technology analysts and strategists in general have been much too optimistic about technology-sector earnings and growth prospects, particularly in the international operations," Lehman explained. "We think that the tech sector has quite a bit further to fall."

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 region slowed 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 GM as 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 profit from 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.

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