Investors slowed their hectic buying of stocks Monday, leaving the major indexes little changed after a four-day advance.
Stocks pulled back from early highs as financials, which have been surging lately, retreated. Analysts had expected a pause after stocks soared last week, lifting the Dow Jones industrials 370 points.
Said Alan Villalon, senior research analyst at First American Funds, "I think people still believe there are signs of recovery here, but it doesn't hurt to take a little bit of profits."
Market experts have been warning, though, that the market's upbeat mood could be tested with reports this week on consumer confidence and housing.
Some signs of recovery have emerged in housing, but consumers are still struggling. Improved consumer confidence and spending is widely seen as one of the keys that could help end the recession.
"We're lining up here in advance of the data this week," said James Cox, managing partner at Harris Financial Group.
"This is a good time to get out."
Bank shares gave up some of their early gains and traded mixed, weighed down by losses among regional banks. Investors have been worried that smaller banks could face significant hardships in the coming months as losses among commercial real estate loans pile up.
In a research note late Sunday, Rochedale Securities banking analyst Richard Bove predicted that 150 to 200 more U.S. banks could fail in the current crisis on top of the 81 banks that have failed this year.
The Dow Jones industrial average rose 3.32 points, or less than 0.1%, to 9,509.28, after earlier rising as much as 82 points. The Standard & Poor's 500 index fell 0.56 points, or 0.1%, to 1,025.57, and the Nasdaq composite index fell 2.92 points, or 0.1%, to 2,017.98.
As investors prepared for $197 billion in auctions this week, the yield on the benchmark 10-year Treasury note fell to 3.49% from 3.55% Friday, and the yield on the three-month T-bill fell to 0.15% from 0.16%.
Oil rose 48 cents to $74.37 a barrel on the New York Mercantile Exchange.
The dollar rose slightly against other major currencies. Gold prices fell.
The markets have been choppy as investors react to mixed economic data, but they managed last week to post four straight advances. The Standard & Poor's 500 index is up 52% since early March.
"We still think there is a lot of fear out there," said Ryan Detrick, chief technical strategist at Schaeffer's Investment Research.
"The economy has to validate what the stock market has done."