Dow Hit Off the Green; Banks Score

As the world watched Tiger Woods and Rocco Mediate take it down to the wire at the US Open, the Dow was struggling with its own rivalry: Banks were trying to lead a rally, while a handful of stocks were dragging on the blue-chip index.

The Dow Jones Industrial Average finished down 0.3 percent at 12269.08. The S&P 500 index finished flat at 1360.14. Techs rallied for a third straight session, bidding up the Nasdaq 0.8 percent to close at 2474.78.

A retreat in oil prices had buoyed the market in afternoon trading but the market failed to hang onto the gains, just as Mediate failed to hold onto the lead in San Diego.

That's just par for the course with stocks these days.

Oil settled down 52 cents at $134.34 a barrel, after earlier hitting a new record above $139 a barrel. News broke over the weekend that Saudi Arabia plans to increase output but a source close to the Saudi oil industry told that the 500,000-barrel-a-day goal may not be achievable.

The market has bobbed around like this for a while, struggling to hold onto gains since retesting the year's lows in March and some market watchers say now is the time to get in.

"Oil, Lehman, the economic numbers -- how long can you talk about the same stuff? The market is getting somewhat aggravated about it," said Charles Massimo, founder of CJM Fiscal Management. (Not, of course, unlike sports fans' aggravation with Tiger Woods victories.)

"As an investor, you want to be ready or start preparing yourself -- don't wait until the market is up 8 percent," Massimo said. "Start to put more money to work now."

Massimo advises rebalancing your portfolio with new money -- adding money to the areas that have gotten out of whack with your initial investment goals -- instead of betting on specific stocks or sectors. He also recommends that investors focus on value and small-cap stocks, which have historically performed well after recessions, via index funds or ETFs.

In economic news, the New York Fed reported its Empire State manufacturing index fell to minus 8.68from minus 3.23 in May. Homebuilder sentiment sankin June, matching its record low, set in December.

The market was buzzing early about an article in the Washington Post this morning that said Federal Reserve Chairman Ben Bernanke doesn't plan to begin raising rates anytime soon. Meanwhile, Richmond Fed President Jeffrey Lacker said Monday that US inflation is "unacceptably high"but it has yet to spill into expectations or wage claims, a hint that the Fed would probably keep rates on hold for now.

Verizon was the biggest decliner on the Dow, falling 2.9 percent, after UBS cut its rating on both Verizon and AT&T to "neutral" from "buy." AT&T fell 1.4 percent.

Coca-Cola was the second, biggest drag on the Dow, sliding 2.2 percent, as beverage makers were hit by concerns that the Midwest floods would drive up price of soda's key ingredient, corn syrup. Corn prices have risen for eight straight days due to the flooding.

Financials recovered from an early slide amid relief after earnings from Lehman Brothers came in as expected.

The S&P financial index ending up 1.1 percent. Citigroup , Bank of America and JPMorgan were the top three gainers on the Dow.

Lehman Brothers shares finished up 5.4 percent as traders breathed a sigh of relief that there weren't any big surprises in the investment bank's earnings report.

(Will Lehman follow in Bear's footsteps? Former Lehman CFO Brad Hintz weighs in. Click on the video at left.)

Lehman delivered aloss of $5.14 a share, or $2.77 billion, exactly what it had pre-announced last week.

"The market was really focused on what Lehman would deliver. They were spot-on in the estimates and their numbers," Peter Kenny, managing director at Knight Equity Markets in Jersey City, N.J., said.

Goldman Sachs and Morgan Stanley are slated to report earnings later this week; shares of both firms rose.

The latest corner-office casualty is AIG CEO Martin Sullivan, who was ousted as the firm's losses mounted and board and shareholder discontent mounted. AIG has named Chairman Robert Willumstad, a former top Citigroup executive, as his successor. Shares wobbled.

Technology stocks benefited from bargain hunting and the idea that tech firms that cater to big corporations have less exposure than other companies to slowing consumer demand.

Chips gained about 1.5 percent, with Broadcom one of the top gainers on the Nasdaq 100, after the International Trade Commission ruled in Broadcom's favor in a patent dispute with SiRF Technology.

Also at the top of the Nasdaq leader board is BlackBerry maker Research In Motion , which has gained favor as investors sell off Apple after months of iPhone-fueled gains and amid concerns about Steve Jobs's health. RIMM shares jumped 6 percent.

Shares of both Sirius and XM Satellite Radio gained more than 3 percent after FCC Chairman Kevin Martin confirmed reports that he would support the 16-month-old deal.

"I am recommending that with the voluntary commitments they've offered, on balance, this transaction would be in the public interest," Martin said in a statement.

This Week:

TUESDAY: PPI; housing starts; current account; industrial production; earnings from Best Buy, Goldman Sachs
WEDNESDAY: MBA mortgage applications survey; oil inventories; Fed's Yellen speaks; Morgan Stanley, FedEx earnings
THURSDAY: Jobless claims; Philly Fed survey; leading indicators; natural gas inventories; Fed advisory panel meets to discuss credit-card regulation

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