Stocks declined as investors continued to consider future troubles in the euro zone and comments over the weekend by Federal Reserve Chairman Ben Bernanke indicating the central bank was willing to pump even more money into the economy.
The Dow Jones Industrial Average fell less than 10 points after posting a significant rise last week despite a weaker-than-expected nonfarm payrolls report on Friday.
Bank of America , DuPont and Microsoft fell, while Cisco and Pfizer rose.
The S&P 500 and the Nasdaq also fell. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 18.
Among key S&P 500 sectors, industrials, health care, and financials fell, while telecom rose.
The dollar rose against a basket of currenciesas the euro fell. Gold continued to gainMonday on prospects of continued Fed easing and euro zone worries, as did silver, which was trading at a 30-year high.
"Bernanke’s comments basically highlighted what people already know — that mainly it will take some time for the unemployment rate to come down to more favorable levels," Michael Sheldon, chief market strategist at RDM Financial Group, told CNBC.com.
"The markets are taking a bit of a breather here after a pretty strong gain of 3 percent last week, also following on the heels of a disappointing jobs report on Friday," Sheldon added.
One reason stocks haven't plunged, especially considered Friday's weak jobs report, is a more general sense of optimism among investors. Sheldon noted 49.7 percent of individual investors surveyed by the American Association of Individual Investorswere bullish on stocks last week, up from a reading of 20.7 percent in August.
The next catalyst for the market will likely be a decision on whether to extend the Bush-era tax cuts,as Congress is now considering. Democrats failed to get tax measures passed in the Senate over the weekend for all but families making $250,000 or more.
If the tax rates are extended, that "could provide consumers and businesses a higher level of confidence as we head into the new year," Sheldon said.
Shares of Bank of America slipped after the Wall Street bank told U.S. regulators it has sold enough assetsto meet the conditions set down in its $45 billion government bailout. BofA was given until the end of the year to generate the funds.
And the world's largest drugmaker, Pfizer , will welcome its new CEO Ian Read who will replace the outgoing Jeffrey Kindler, who retired unexpectedly, saying he needed to "recharge his batteries."
And Kellogg announced CEO David Mackay will retireeffective Jan. 1, and will be replaced by John Bryant, currently chief operating officer.
Kraft fell after news the food products company was taking its battle with Starbucks to federal court.Kraft wants to stop Starbucks from ending their agreement allowing Kraft to sell Starbucks packaged coffee.
Wal-Mart fell slightly after the U.S. Supreme Court said it would decide whether the largest sex-discrimination class-action lawsuitin U.S. history against the discount retailer's stores can proceed. The case centers on 1.5 million current and former female workers who seek billions of dollars in damages. The court said the charges from million of women were too diverse to proceed as a single class-action lawsuit.
In the technology sector, AOL could be on the brink of a series of transactions to breakup the Internet content provider, whichcould culminate in a mergerwith Yahoo , Reuters reported, citing sources.