Stock prices eased in slow trading Monday as some fresh corporate earnings warnings caused investors to step back.
Technology issues, which have suffered the most as the economy has slowed, were among the weakest, but losses were spread across market sectors.
The Dow Jones industrial average finished the day down 54.91 points, or 0.5%, at 10,922.09 after dropping 113 points Friday.
Wall Street's broader indicators were also lower. The Nasdaq composite index fell 44.32 points, or 2.0%, to 2,170.78, and the Standard & Poor's 500 index declined 0.8%.
The market, which rallied in April and early May, has been giving back some of its gains and experiencing lighter volume as investors await signs that the economy is benefiting from the five interest rate cuts made this year by the Federal Reserve.
Until corporate earnings and the economy begin to strengthen, many investors aren't inclined to buy, especially at the higher prices generated from the spring run-up, during which the Dow jumped nearly 21% from its 2001 low close of 9,389.48 on March 22.
Among Monday's losers was Juniper Networks, which fell $2.69 to $35.33, after tumbling $8.61 on Friday on news of lower earnings and layoffs. Intel also fell, finishing down 34 cents Monday at $30.33, despite announcing last week that it still expects to meet quarterly earnings forecasts.
Among the tech companies warning Monday of weaker near-term earnings was Varian Semiconductor Equipment, which lost $3.22 to $39.25.
In blue chips, prices fell across risky and safer sectors alike. Microsoft dropped $1.07 to $72.12, and Johnson & Johnson slipped 64 cents to $101.37. Both are Dow components.
Declining issues outnumbered advancers 3 to 2 on the New York Stock Exchange, where consolidated volume came to just over 1 billion shares. That compares with 878.15 million shares Friday, when a computer glitch forced the NYSE to suspend trading in the morning for about 90 minutes. On Nasdaq, losers led winners 8 to 5 in light trading.
Among Monday's highlights:
* Shares of Morgan Stanley Dean Witter lost $2.34 to $62.25 after the securities firm was reported to have held merger talks with American Express, which gained 42 cents to $41.41. Most brokerage stocks closed lower.
* Finova Group gained 81 cents to $3.95 after a bailout plan by a group led by investor Warren Buffett received the backing of the bankrupt finance firm's management.
* Treasuries rallied on news that Japan's economy contracted during the first quarter, spurring hopes the Federal Reserve will lower interest rates at least once more this year. The yield on the benchmark 10-year Treasury note fell to 5.29% from its Friday close of 5.36%.
* The initial public offering of London-based insurance broker Willis Group Holdings was priced at $13.50 a share for 20 million shares, raising $270 million. The price was above the expected range of $10 to $12. The stock will begin trading today on the NYSE under the ticker symbol WSH.
Market Roundup, C11, C12