Stocks continued to trade narrowly mixed amid a session lacking much economic news and following a second straight week of solid gains as the markets considered what's next for the Middle East.
The Dow Jones Industrial Average fell more than 15 points after ending last week higherfollowing Egyptian President Hosni Mubarak's decision to step down, and the U.S. government's plan to cut the size of the Federal Housing Administration.
Verizon, Wal-Mart, and Hewlett-Packard led blue chips lower, while Alcoa and Exxon Mobil rose.
The S&P 500 rose slightly, remaining within a few points of doubling its ominous 666 intraday low hit on March 6, 2009, a point considered the next resistance level for the broad-market index. The tech-heavy Nasdaq rose slightly. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 16.
Among key S&P 500 sectors, utilities, consumerdiscretionary and telecom fell, while energy and materials rose.
The dollar rose against a basket of currenciesas the euro struggled amid reports that Germany’s financial watchdog has become involved in a rescue of WestLB. Gold rose slightly above $1,360 an ounce.
Meanwhile, oil prices began to advance again Monday after Chinese trade data indicated a rise in imports of crude, and as unrest rippled throughout the Middle East. Brent crude rose to about $102 a barrel, while U.S. light crude was up slightly above $86 a barrel.
Concerns over Middle East have eased somewhat since Mubarak’s exit, but the outlook for Egypt remains uncertain and more unrest could cause further volatility. The Market Vectors Egypt Exchange-Traded Fund continued to trade higher, although the Egyptian stock market, on which the ETF is based, remains closed.
President Obama's budget aims to slash $1.1 trillion from the U.S. deficit over 10 years and includes a range of domestic spending reductions that would put the government on track to halve the federal budget deficit by the end of Obama's first term in office.
With no macroeconomic data due on Monday, investors will gear up for retail sales data on Tuesday and inflation figures later in the week. Creeping inflation has increasingly become a concern for investors.
Materials stocks got a boost from Citigroup, which raised its price targets for several steel and coal companies, saying international demand will support higher prices for the sector.Citi boosted US Steel's price target to $60 a share from $57, Freeport McMoran's to $60 a share from $59, and Cliffs Natural Resources to $108 a share from $87. The brokerage also lifted the stocks of coal companies, including Patriot Coal, Arch Coal and Peabody Energy.
Elsewhere, Wal-Mart's shares were under pressure after JPMorgan became the latest brokerage to downgrade the big-box retailer. JPMorgan lowered Wal-Mart's rating to "neutral" from "overweight," and cut its price target to $54 a share from $59. The brokerage said the deterioration in the company's same stores sales results could last for years and that its response to heightened competition has fallen short.
Nokia fell after news the wireless handset maker has entered into a partnership with Microsoft. Also, JPMorgan downgraded the company on Monday to "underweight" from "overweight."
Also Clorox shares fell after UBS cut the consumer products company's stock to "neutral" from "buy" by UBS, and to "underperform" from "neutral" by Bank of America Merrill Lynch. Clorox had soared Friday after news activist investor Carl Icahn owns about 9 percent of the company's shares.
Green Mountain Coffee Roasters fell after news reports over the weekend that rival Starbucks may soon offer a single-serve product to compete in a niche that had been dominated by Green Mountain. Cannacord Genuity believes Starbucks and Green Mountain are likely to parnter in creating a new technology for the Keurig brewing systems.
In earnings news, MGM Resorts sank after reporting a loss in the fourth quarter that was still less than the loss reported a year ago. Marriott International traded flat ahead of reporting earnings after-the-bell on Monday.
Earnings expected to take center-stage later this week include Dell , which will release quarterly figures after the bell on Tuesday, while Deere will report before Wednesday’s opening bell.
In merger and acquisition news, General Electric will buy the well support division of British energy services firm John Wood Group for about $2.8 billion. General Electric owns a stake in CNBC's parent company, NBC Universal.
Also, private equity company Clayton Dubilier & Rice was close to buying Emergency Medical Servicesand EchoStarhas agreed to buyHughes Communications for about $1.33 billion, excluding debt, a move that will boost the broadband capabilities of the communication equipment provider.
Seahawk Drilling plunged after news Hercules Offshore has agreed to buy off-shore drilling rigs and related assets from its rival for $100 million in cash and stock.
Some of the biggest financial policymakers appear before Congress this week, with the highest-profile event on Thursday when Federal Reserve Chairman Ben Bernanke testifies before the Senate Banking Committee.
The panel will also hear from the heads of the Securities and Exchange Commission and the Commodity Futures Trading Commission.
In Europe, Italy sold 5.2 billion euros in government bonds on Monday morning in an auction analysts said received solid demand.
Meanwhile, European shares closed at a 29-month high, led by mining stocks. The FTSEurofirst300 index rose 0.3 percent.
Coming Up Next Week:
MONDAY: NY Fed President speaks; earnings after-the-bell from Marriott.
TUESDAY: Retail sales, Empire state manufacturing survey, import & export prices, Treasury international capital, business inventories, housing market index, Cleveland Fed President speaks, Dodd-Frank hearing, Geithner testifies before U.S. House, Fannie/Freddie reform hearing, credit-card default rates reported, 13-F filings due; earnings before-the-bell from Barclays; earnings after-the-bell from Dell and Tesla.
WEDNESDAY: Weekly mortgage applications, housing starts, PPI, industrial production, House hearing on FCIC report, oil inventories, FOMC minutes; earnings before-the-bell from Comcast; earnings after-the-bell from CBS, NetApp and Nvidia.
THURSDAY: Weekly jobless claims, CPI, leading indicators, Philadelphia Fed survey, Chicago Fed President speaks, money supply; earnings before-the-bell from Barrick Gold, AngloGold and Nordstrom.
FRIDAY: Earnings before-the-bell from Campbell Soup.
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