Stock ended the session largely flat, with the Dow slightly lower before the close, after a session marked by quiet trading in a narrow range on mixed economic data. Technology stocks gave a slight boost to the Nasdaq, which ended higher.
The Dow Jones Industrial Averagewas down just over a point with Cisco , Intel and Caterpillar leading the advancers.
3M and Boeing were the biggest decliners.
TheS&P 500eked out a gain, while the Nasdaq ended up more than 2 points. The CBOE Volatility Index, the widest gauge of fear in the market, fell below 26.
Technology and materials stocks were up, while health care, financials and telecom fell.
Last week marked the worst week for the marketsin the past six, with the major indexes falling 3 to 5 percent.
In positive economic news, bank lending standards at the biggest financial institutions are beginning to ease, according to the Federal Reserve's quarterly senior loan officer survey.
Nonetheless, despite some buying interest particularly in technology and materials, traded in narrow range.
"My perspective is the market’s focus is slowly turning from the great second quarter earnings reports to the emerging reality that the economy is slowing," said Alan Gayle, senior investment strategist for RidgeWorth Investments.
Gayle believes the markets will remain challenging to navigate for sometime, but said his firm believes a transition is underway from a "statistical bounce" to a "low trajectory sustainable recovery."
"What that means is the market is taking a much more conservative look at valuations," Gayle said, adding that the situation creates an opportunity. "There will be weakness through the rest of summer and into the fall, but because I believe the recovery is sustainable, we will see some pickup in the market as we finish up the fourth quarter."
In the tech sector, Cisco rose more than 2 percent and was one of the best performing Nasdaq stocks. Last week, the Internet network equipment maker tumbled following a disappointing revenue forecast.
Intel shares rose after the tech giant
Dell dipped after itannounced plans to buy 3PAR, a data storage company, for $18 per share in cash, or $1.15 billion, an 87 percent premium over 3PAR's price on Friday. And Brokerage Gleacher & Co cut its price target on Dell to $18 from $19.
Apple was down slightly after amanager was arrested Friday and indicted in an alleged kickback scheme involving Asian suppliers of accessories for the iPhone and iPod.
Research In Motion shares tumbled almost 5 percent after the BlackBerry maker assured Indian authorities of limited access to its Messenger servicesby Sept. 1, according to government sources. The company is also expected to hold talks later this week on giving access to enterprise mail.
Shares of credit card issuers Visa and MasterCard were mixed after U.S. credit card charge-offs and delinquencies fell in Julyat big credit card lenders as fewer Americans fell behind on their payments.
Financial stocks may see the effects of a clause in the Dodd-Frank financial reform bill that means many banks can buy back trust preferred securities, equity instruments that pay interest like bonds, before they lose their status as tier-one capital. Trups, as they are known, are an expensive form of capital and banks would like to replace them with cheaper forms.
Meanwhile, Bank of America said it is considering reducing its 35 percent stake in BlackRock, according to The Wall Street Journal.
On the earnings front, Lowe's shares rose slightly after the retailer turned in in slightly disappointing earnings and sales data and warned of a bleaker outlook ahead until the housing market turns around. Still, some traders thought the news from the home improvement retailer could have been worse. Rival Home Depot is expected to report Tuesday before the bell.
More insight on the health of the economy will come later this week when Wal-Mart reports earnings before the bell Tuesday, and Target reports Wednesday. Both stocks are down slightly.
Meanwhile, retailer Urban Outfitters and scientific-instrument maker Agilent are scheduled to report earnings this afternoon.
Meanwhile, shares of education firms fell Monday after the U.S. Department of Education reported student loan repaymenta data showed most for-profit schools would be ineligible for federal aid. Corinthian Colleges , Education Management and Strayer Education all tumbled. Apollo Group , however, was the biggest gainer in the Nasdaq, up more than 5 percent.
In the day's economic news, homebuilder confidence fell to 13 in August, its lowest level since March 2009, and less than an expected reading of 15. The index was at 14 in July, according to the National Association of Home Builders Index.
“Builders are expressing the same concerns that they are hearing from consumers right now, particularly the sense that the overall economy and job market aren’t gaining any traction,” NAHB Chairman Bob Jones, a homebuilder from Bloomfield Hills, Mich., said in a statement. “Meanwhile, many continue to report that problems with inaccurate appraisals, competition from the large number of distressed properties on the market, and tight consumer lending conditions are causing them to lose potential sales.”
More information about the state of the housing market will be learned Tuesday when July housing starts are released. Also, the Treasury Department is scheduled to host a public forumon reforming Fannie Mae and Freddie Mac.
A gauge of manufacturing activity in New York reported a slight increase after plunging in the previous month, according to the New York Federal Reserve. Still, the results were below expectations.
And China officially took over Japan as the number two economybehind the U.S., after Japan reported its economy was valued at about $1.28 trillion in the second quarter, slightly behind China’s $1.33 trillion economy.
Hulu, an Internet site for watching television shows and movies is reportedly making plans to go public as early as this fall in a deal valued at about $2 billion.
Comex gold for August delivery rose for the fourth consecutive session, gaining 0.79 percent to $1224.50. Meanwhile, Nymex crude oil for September delivery fell for the fifth day by 0.20 percent to $75.24.
On Tap This Week:
TUESDAY: Producer Price Index, Housing starts, industrial production; earnings before the bell from Home Depot, Wal-Mart, Abercrombie & Fitch and TJX
WEDNESDAY: MBA mortgage applications, weekly oil inventories; earnings before the bell from Deere and Target
THURSDAY: Jobless claims, leading indicators, Philadelphia Fed survey; earnings after the bell from HP, Dell, Gap and Intuit
FRIDAY: No major events scheduled
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