Stocks wobbled Monday as investors weighed a slew of M&A activity against a disappointing Empire State manufacturing report and weak outlook from Lowe's.
The Dow Jones Industrial Average was up about 10-20 points at the start but then quickly slipped into negative territory.
The New York Fed reported its gauge of regional manufacturing activity fell to 19.11in May from 31.86 in April. The level still indicates growth but was much weaker than the 30 expected.
The NY Fed report, along with the Philly Fed report, due out on Thursday, are watched closely as a precursor to the national report on manufacturing from the Institute for Supply Management.
Home Depot was the biggest drag on the blue-chip index after rival Lowe's beat earnings expectations for the quarter but disappointed with it its outlook, saying 2010 will be "a year of transition."
This comes after a rocky week last week, in which the Dow lost 1.5 percent on Friday but ultimately finished up 2.3 percent for the week.
Lowe's was just the latest in a string of companies that beat their earnings targets but issued disappointing outlooks.
Last week, Cisco CEO John Chambers rattled the market. The networking-gear maker beat on both earnings and revenue but Chambers said there is still reason for caution given the weak job market.
Priceline, JC Penney, Kohl's and Nordstrom also delivered weak outlooks last week.
The dollar see-sawed against the euro after earlier hitting a four-year highagainst the European common currency amid worries about the debt crisis.
Oilfell back below $70 a barrelto its lowest in over three months.
Goldheld steadyaround $1,233 an ounce after last week surging above $1,245. One mining executive said the precious metal is headed to $2,000 by year end.
Big M&A day: Private equity firm is in talks to buy Pactiv, which makes Hefty bags, the Wall Street Journal reported. Pactiv shares surged more than 20 percent.
Hospital operator Universal Health Services agreed to buy mental-health-facility operator Psychiatric Solutions for about $2 billion in cash. Astellas Pharma, Japan's No.2 drugmaker, agreed to buy U.S. biotech OSI Pharmaceuticals , which makes the cancer drug Tarceva,
Still to come:The National Association of Home Builders is out with its monthly sentiment index, expected to edge higher to 20 from April's 19 reading, at 1 pm ET.
Apple got a boost after a report showed Asian bankers prefer the iPhone to Research In Motion's BlackBerry for business.
BP got a boost after its latest recovery effort, siphoning oil out of the hole using a mile-long tube, seemed to work.
General Motorsreported a profit for the first quarter and the government is apparently looking for a Wall Street bank to serve as an adviser for a GM IPO, the Wall Street Journal reported.
Asian stocks tumbled overnight in a follow-up to Wall Street's Friday losses, although European averages managed late-morning gains.
MONDAY: NAHB housing index
TUESDAY: JPMorgan & Massey Energy shareholders meeting; Fed’s Pinalto speaks; housing starts; PPI, earnings from Home Depot, Wal-Mart & Hewlett-Packard
WEDNESDAY: FOMC minutes; Google developers’ conference; weekly mortgage apps; CPI; weekly crude inventories; earnings from Deere, Target, Applied Materials
THURSDAY: Toyota/NHTSA hearing; BOJ monetary policy meeting; weekly jobless claims; leading indicators; Philadelphia Fed survey; earnings from Computer Sciences, Gamestop, Staples, Dell, Gap
FRIDAY: Earnings from Ann Taylor
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