Stocks closed mixed with the broader market lower as European sovereign debt troubles drove the dollar higher.
The Dow Jones Industrial Average fell 37.24 points, or 0.3 percent, to close at 11,406.84, after stocks reached two-year highslast week.
Travelers , Boeing , and Home Depot led the blue-chip index lower, while Bank of America and Hewlett-Packard gained.
The S&P 500 fell 2.60 points, or 0.2 percent, to close at 1,223.25, while the Nasdaq rose 1.07 points, or 0.04 percent, to close at 2,580.05. The CBOE Volatility Index, widely considered the best gauge of fear in the market, rose above 18.
Most key S&P sectors declined, led by financials, utilities and industrials. Energy and materials sectors rose.
After a week busy of U.S. news, including the mid-term elections, the Fed's decision to pump $600 billionin the economy, and a strong October jobs report, investors were turning their attention to Europe, where the Irish bond market was suffering from the government's plans to double spending cuts and to increase taxes to trim its deficit.
As a result, the dollar rose against a basket of currencies, and gained nearly 0.8 percent over the euro. Stocks have moved inversely to the stock market, and Monday was no exception, as the broader market declined.
Debt troubles within the so-called "PIGS" nations, of Portugal, Ireland, Greece and Spain, won't go away any time soon, said Uri Landesman, president of Platinum Partners, a hedge fund.
If the market ends higher for the year, with the S&P 500 Index at 1,275 or more, "my initial prediction for next year is a flat market," Landesman said.
That's because there's a "20 percent probability of a major systemic shock next year, driven by the dollar and the PIGS," he said. "I don’t see it going away."
Declines in bank shares could go beyond profit-taking from last week's gains. A pledge from the Federal Reserve to keep interest rates near record lows was viewed as hurting bank profits.
Large financials including Goldman Sachs , JPMorgan and Morgan Stanley were all in the red.
Citigroupdebt funds were under scrutinyby the U.S. Securities and Exchange Commission, which is assessing whether the bank adequately disclosed to investors the risk levels in the funds, the Wall Street Journal reported.
Technology stocks were led higher by JDS Uniphase, which jumped to the top of the S&P gainers after the telecommunications equipment maker received a nod from Barron's, which said the company would benefit from a burst of interest in Web video. JDS Uniphase is working with manufacturers to boost capacity on the Internet to allow for more video traffic.
Hewlett-Packard , meanwhile,got a boost from UBS, which raised its price target for the computer maker to $48 a share from $44, and put a short-term "buy" rating on the stock.
Intel shares ended down despite an upgrade by UBS to "buy" from "hold." The performance of the rest of the semiconductor market was mixed as National Semiconductor was downgraded by RBC to "underperform" from "sector perform," as the brokerage believes the chip maker isn't in step with rivals in the smartphone market. Shares of rival AMD , however, advanced.
Meanwhile, DISH Network fell after UBS downgraded the company to "neutral" from "buy" and cuts its price target to $23 a share from $26, citing concerns about the company's ability to grow. Evercore Partners, however, raised the pay-TV company's shares to $26 a share from $24.
Oracle and SAP battled it out in a California court on Monday, as Oracle CEO Larry Ellison, charged SAP, its archrival, of stealing billions of dollars in copyrighted software.
The Wall Street Journal reported on Sunday that AOLwas exploring strategic options, which include a possible tie-up with Yahoo. AOL has retained financial advisers.
Amazon.com climbed after the online retailer said it plans to buy the owner of online shopping sites Diapers.com and Soap.com for $500 million, as it aims to sell more household items that need to be replenished.
Boeing skidded after news the aircraft maker will delay delivery of the 787 Dreamliner for as much as 10 months, according to Aviation Week.
McDonald's shares were slightly higher after news the fast-food company's same-store sales rose 6.5 percentin October, more than expected by Wall Street. McDonald's U.S. sales disappointed, however.
The food-service distributor Sysco's shares dropped after it reported an 8.3 percent slide in its fiscal first-quarter earnings in part because of rising food costs.
Safeway skidded after UBS cut the grocery store chain to "sell" from "neutral," while Hain Celestial Group rose after Jefferies, RBC and Barclays raised their price targets for the organic foods company.
GT Solar jumped after the solar-equipment maker reported its profit quadrupled, thanks to strong sales and higher margins. The company also boosted its 2010 guidance.
Coventry Health Care soared after at least four brokerages raised their price targets for the health care insurer. Wells Fargo also raised its rating on the company to "outperform" from "market perform."