Stocks retreated Monday as investors took a breather after a four-week rally, capped by a better-than-expected jobs report on Friday.
After climbing for four straight weeks, major indexes are trading around their highest levels since November, when the meltdown began, so market pros said it's only natural that stocks were due for a pullback.
"We are in a mild profit-taking mode after a rally, and we are also nearing September, the historically worst month for stocks," Art Hogan, chief market analyst at Jefferies, told Reuters.
No major economic statistics are due out today. Investors are already looking ahead to a two-day Fed meeting, which begins Tuesday.
After Friday's jobs report showed the U.S. unemployment rate fell in July for the first time in 15 months, bets on the central bank raising interest rates by up to a quarter percentage point by year end increased to as high as a 46 percent chance from 34 percent shortly before the data, according to Reuters.
In addition to the Fed, investors will be watching the retail sector this week as the government delivers its report on July retail sales and a slew of retailers deliver earnings, including Wal-Mart .
Wal-Mart shares ticked higher, even after JPMorgan said the retail giant won't see same-store sales growth for the second quarter as summer business was weak, but most other retailers declined.
Macy's and JCPenney, which report earnings later in the week, were both down more than 3 percent.
State Street bank declined as the bank said in an SEC filing that its reserve for exposure to subprime "may not be sufficient."
Most of the sector followed State Street lower but Citigroup was up more than 3 percent. Bank of America and JPMorgan also advanced after a report showed U.S. banks are poised to make $38.5 billion from customer overdraft feesthis year and as they're also likely to benefit from all the new car buying that has resulted from the "Cash for Clunkers" program.
Speaking of clunkers, General Motors and eBay announced this morning that hundreds of GM dealers in California are going to start auctioning cars online.
McDonald's reported its same-store sales rose 2.6 percentin July, helped by its new upscale coffee offerings.
Hormel , maker of Spam and Jennie-O Turkey products, raised its 2009 forecast amid strength in its refrigerated-food segment.
Microsoft is selling its digital-advertising firm Razorfishto French ad firm Publicis in a deal valued at $530 million.
Elsewhere in tech, Research In Motion shares skidded after being downgraded to "neutral" by UBS.
Warren Buffett's Berkshire Hathaway could be a stock to watch, after posting its best quarterly results in nearly two years after the bell on Friday.
The U.S. Treasury will auction $75 billion in new government bonds, while Germany is due to issue 6 billion euros of the benchmark 10-year Bund on Wednesday.
- Peter Schacknow contributed to this report.
MONDAY: SEC hearing on Bank of America/Merrill Lynch
TUESDAY: Two-day Fed meeting begins; wholesale trade; Treasury 3-year auction; Earnings from Applied Materials
WEDNESDAY: Weekly mortgage applications; international trade; weekly crude inventories; Treasury 10-year auction; Fed announcement; Earnings from Macy's
THURSDAY: Retail sales; weekly jobless claims; import/export prices; business inventories; Treasury 30-year auction; Earnings from Wal-Mart, Kohl's and Nordstrom
FRIDAY: CPI; industrial production; consumer sentiment; Earnings from JCPenney
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