Stocks closed slightly lower after fluctuating in a narrow range for most of the session Monday as investors appeared reluctant to make big commitments ahead of the news from the U.S. and European central banks later this week.
The Dow Jones Industrial Average shed 2.65 points, or 0.02 percent, to end at 13073.01, led by JPMorgan . The index posted its ninth consecutive Monday in the red. The last time the Dow fell nine Mondays in a row was in July 1973.
The S&P 500 lost 0.67 points, or 0.05 percent, to close at 1385.30, while the Nasdaq closed at 2945.84, down 12.25 points, or 0.41 percent. The CBOE Volatility Index, widely considered the best gauge of fear in the market, jumped near 18.
Investors took a defensive posture, with telecoms, consumer staples and utilities leading the S&P sector gainers, while health care fell.
"The key test for the market will be whether the S&P 500 can hold above 1,375, Friday’s breakout—if some of the potential negative divergences come to fruition, then support may give way which will make for the move above 1,375 a false break out," said Elliot Spar, market strategist at Stifel Nicolaus.
Treasury Secretary Timothy Geithner and German Finance Minister Wolfgang Schaeuble promised to cooperate in advancing policies to stabilize the euro zone nations. Last week, ECB president Mario Draghi said the bank was ready to do whatever was necessaryto save the euro.
European shares finished higher amid ongoing optimism for fresh measures from the ECB to fight the euro zone debt crisis. (Read More: After Pledge to Help Europe, Pressure Is On for Draghi)
The Federal Reserve also will hold a two-day meeting this week. U.S. investors will be looking for signs as to whether the Fed will undertake additional steps to spur growth when it releases its statement Wednesday.
“At this meeting, my expectation is that the Fed includes some dovish indications in the statement,” Nathan Sheets, Citigroup global head of international economics, told CNBC’s “Squawk Box.” “But I think the Fed is going to want to see a little bit more before it jumps in with the QE3 kind of operation.”
Apple stock rallied near $600 a share amid unconfirmed reports that the tech giant will hold an event on Sept. 12 to unveil the iPhone and the iPad mini. Meanwhile, the company announced there were over 3 million downloads of its new operating system, Mountain Lion, in four days, making it the most successful operating release in the company's history.
Separately, the iPad maker and rival Samsung are set to kick off a patent trialin the U.S. with billions at stake.
AT&T hit a new 52-week high after the telecom company authorized a plan to repurchase up to 300 million, or about 5 percent, of its outstanding shares.
Among financials, JPMorgan slumped after Deutsche Bank downgraded the Dow component to "hold" from "buy," saying that net interest income will likely remain under pressure for the next couple of quarters.
Loews tumbled after the insurance company posted a decline in quarterly profit, largely hurt by weak earnings at 50 percent-owned Diamond Offshore Drilling .
Shares of CIT Group jumped after the company reported a loss that still beat Street expectations. CIT is headed by former Merrill Lynch CEO John Thain.
Supervalu shares soared, after the company ousted its CEO in an effort to halt a fall in sales and earnings and as the company considers whether to sell the company. Chairman Wayne Sales will replace Craig Herkert, a former Wal-Mart Stores executive brought in three years ago to fix the supermarket chain.
On the M&A front, engineering company Chicago Bridge & Iron said it would acquire Shaw Group in a deal worth nearly $3 billion.
Roper Industries roseafter the diversified manufacturer boosted its full-year 2012 earnings forecast and said it will acquire privately-held laboratory software service provider Sunquest Information Systems for about $1.4 billion.
On the economic front, manufacturing activity in Texas dropped sharply in June to its lowest in nearly a year, according to the Dallas Fed manufacturing index.
Earnings season continues this week. Dow components Pfizer, Kraft and P&G are scheduled to post throughout the week along with other notable firms including Comcast, General Motors, LinkedIn and Berkshire Hathaway. (Comcast is the parent company of NBCUniversal and CNBC.)
Coming Up This Week:
TUESDAY: Personal income & spending, employment cost index, S&P Case-Shiller home price index, Chicago PMI, farm prices, FOMC mtg begins; Earnings from BP, Honda, Pfizer, Aetna, Deutsche Bank, UBS, Valero, Electronic Arts, Take Two, DreamWorks
WEDNESDAY: Weekly mortgage apps, ADP employment report, PMI manufacturing report, ISM mfg index, construction spending, oil inventories, auto sales, FOMC mtg announcement; Earnings from Comcast, Dollar Thrifty, Marathon Oil, MasterCard, Time Warner, Green Mountain Coffee, Hartford Financial, MetLife, Prudential Financial, Yelp
THURSDAY: Jobless claims, factory orders, chain-store sales; Earnings from GM, Sony, Clorox, Teva Pharmaceuticals, Time Warner Cable, AIG, Kraft, Activision Blizzard, LinkedIn, Sunoco, Opentable, Zipcar
FRIDAY: Employment situation, ISM non-mfg index; Earnings from P&G, Toyota, Beazer Homes, NYSE Euronext, Berkshire Hathaway
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