Wall Street stalled Monday, as investors took profits from last weeks big rally and considered the possibility that the Federal Reserve might not cut interest rates after all.
Blue chips pulled back slightly, while technology shares managed a small gain.
Analysts said potential buyers wanted to see what retail earnings and other economic data looked like, and whether companies would meet a government deadline to certify financial statements later this week.
The Dow Jones Industrial Average closed down 56.76, or 0.7 percent, at 8,688.69, after rising 432 points last week.
Broader stock indicators were mixed.
The Standard & Poors 500 index slipped 4.84, or 0.5 percent, to 903.80, while the Nasdaq composite index rose 0.72 to 1,306.84.
Although the markets losses narrowed late in the day, analysts were hesitant to read too much into the move, noting that trading volume was light -- suggesting most investors were staying away.
"There's just not much going on today," said Robert Streed, portfolio manager of Northern Select Equity Fund Inc. in Chicago. "People are just waiting to see what the Fed is going to do Tuesday, who does or doesn't sign their financial documents on the 14th and to see if market can continue its uptrend." Stocks rose steadily last week on a mix of bargain-hunting following a huge selloff and hopes that the Fed might cut interest rates further because of data suggesting that the economy is faltering.
The Fed's Open Market Committee is scheduled to meet Tuesday.
Investors also were selling to lock in gains from last weeks rally.
"At one time, the market had hoped they were going to cut, I dont think the Fed is going to," said Mike Kayes, chief investment officer at Eastover Capital Inc. in New York. "Theyre going to remain on the sidelines."
The decision by the Arlington-based US Airways Inc. to file for bankruptcy over the weekend started the session on a sour note for the airlines sector.
Trading in US Airways was delayed -- and the stock was to be removed from the Dow Jones Transportation Average at the close of trading today, to be replaced by Continental Airlines Inc.
UAL Corp., United Airlines parent, fell $1.40 to $3.80, on concerns the carrier, based outside Chicago, also is vulnerable and might be the next carrier forced into bankruptcy.
Boeing Co., which makes airplanes, fell 50 cents, to $40.50.
Technology stocks, which had enjoyed sizable gains last week, struggled.
Intel Corp. fell 36 cents, to $17.50, after Salomon Smith Barney Inc. reduced its estimates on the stock, citing soft demand.
Applied Materials Inc., which counts Intel as one of its biggest customers, was down 28 cents, to $13.58 ahead of earnings due out Tuesday.
But Imclone Systems Inc. rose 68 cents, to $8.02 after founder and former chief executive Samuel D. Waksal pleaded innocent to insider-trading charges.
Waksal also said he still believed his companys highly touted cancer drug, Erbitux, has the potential to help thousands of cancer victims.
Investors also were focused on retailers, many of whom are expected to report earnings Tuesday, including J.C. Penney Co. and Wal-Mart Stores Inc.
Penney rose 12 cents, to $16.75, while Wal-Mart fell 79 cents, to $48.41.
Also this week, investors will be watching Wednesday to see whether the companies required to certify their financial reports meet the Securities and Exchange Commissions deadline.
Among the companies certifying results Monday were J.P. Morgan Chase Inc. and Kellogg Co., but the move failed to help their stocks.
J.P. Morgan Chase fell 89 cents, to $25.46, while Kellogg dropped 2 cents, to $34.70.
Analysts say the main issue for the market remains the prospects for improving profits at companies, many of which have so far been hesitant to say business is getting better.
"Were going to bounce around until we get a clear picture about whether the economy is going to accelerate in the second half or consumer spending will slow," Kayes said.
Declining issues led advancers 8-to-7 on the NYSE. Volume on the Big Board was light.
The Russell 2000 index of smaller-company issues rose 0.15, to 388.60.
In overseas trading, Japans Nikkei stock average fell 2.5 percent.
In Europe, Germanys DAX index lost 3 percent, Britains FTSE 100 fell 2.3 percent, and Frances CAC-40 slipped 2.4 percent.
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