NEW YORK (CNNfn) - The Nasdaq composite index tumbled more than 2 percent Monday, falling to its lowest level in nearly a month as investors wary of slowing corporate profit growth unloaded high-priced technology stocks.
Losses in Sun Microsystems, Oracle and Cisco Systems, which all trade at more than 40 times next year's earnings, weighed on the Nasdaq. Declines in IBM and Hewlett-Packard, meanwhile, sent the Dow Jones industrial average lower.
Analysts explaining the losses cited a combination of selling momentum from last week coupled with fear that technology stock prices still don't reflect forecasts for a cooling economy. A fresh surge in oil prices, meanwhile, reminded Wall Street that business and consumers will pay more for heating and transportation costs in the months ahead, effectively enacting a tax on the economy.
"We are in the pre-announcement season for earnings," John Zimmerman of Banc of America Capital Management told CNNfn's market coverage. "We are very likely to see companies announce negative earnings and that's going to put damper on enthusiasm for stocks."
 That damper was felt most among technology shares, with the Nasdaq falling 82.06 points, or 2.1 percent, to 3,896.35, extending last week's 6 percent drop. For the Nasdaq, Monday's was the lowest close since Aug. 16's finish of 3,861.21. The Dow industrials lost 25.16 to 11,195.49 while the S&P 500 declined 5.24 to 1,489.26.
In a seesaw session, the market opened lower before grinding higher. But gains faded to losses by session's end. The inconsistency is nothing new: investors for months have rotated in and out of stocks amid confusion about how much the economy's slowdown will impact earnings.
"It's a follow-through from last week," said Tony Cecin, director of equity trading at U.S. Bancorp Piper Jaffrey, when asked about the losses. "It's earnings misgivings. Will they come to pass? We'll have to see."
 Market breadth was mixed. Advancing issues on the New York Stock Exchange topped declining ones 1,525 to 1,298 on trading volume of 901 million shares. But Nasdaq losers beat winners 2,441 to 1,564 as more than 1.4 billion shares changed hands.
In other markets, the euro continued to soften against the dollar while the U.S. currency was little changed versus the yen. Treasury securities edged lower.
A September to forget?
September is historically a tough time for U.S. markets and this month is looking no different, with the Nasdaq falling four of the last six sessions.
Hurting the index Monday, Oracle (ORCL: Research, Estimates) fell $3.13 to $83.44, Sun Microsystems (SUNW: Research, Estimates) lost $5.50 to $115.25 and Cisco Systems (CSCO: Research, Estimates) declined $2.69 to $61.19.
After a strong August, last week was Wall Street's first losing week since July. It occurred after a series of companies warned that corporate earnings would not meet expectations.
Charles Payne, head analyst at Wall Street Strategies, does not see the Nasdaq breaking out of its current trading range until the markets get past this so-called "confessional period."
 No major companies warned about earnings Monday. But IBM (IBM: Research, Estimates) lost $4.75 to $124.75 after Goldman Sachs cut the company's fourth-quarter profit estimates to $1.50 per share from $1.53.
And Hewlett-Packard (HWP: Research, Estimates) shed $7 to $114. The computer and printer maker confirmed it is in talks to buy the management consultant business of accounting firm PriceWaterhouseCoopers.
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But investors found some places to hide Monday. Dow component J.P. Morgan (JPM: Research, Estimates) added $5 to $169. Morgan has surged in recent weeks on merger speculation, which may have picked up on the latest consolidation move.
Specifically, Goldman Sachs (GS: Research, Estimates) agreed to buy Spear Leeds & Kellogg, a Wall Street firm that clears trades on the New York Stock Exchange and Nasdaq, for $6.5 billion. Goldman, making its first major acquisition since going public last year, gained $8.06 to $132.31.
Other financial stocks also rose. Lehman Brothers (LEH: Research, Estimates) jumped $11.94 to $160 and Bear Stearns (BSC: Research, Estimates) gained $2 cents to $72.130.
 Retail stocks also advanced. Banc of America Securities started coverage on Wal-Mart stock with a "buy" rating, sending Wal-Mart (WMT: Research, Estimates) up $2.13 to $54.25.
Banc of America analyst Thomas Tashijian put a $63 price target on Wal-Mart stock, and said he expects earnings per share to grow by 16 percent this year. Home Depot (HD: Research, Estimates) gained $1.31 to $54.31.
In other markets, oil prices rose early Monday despite OPEC's decision over the weekend to raise crude output. The gains are part of a trend -- oil jumped to a 10-year high last week, a development that could hurt profitability among airlines, trucking firms and shippers that must buy the fuel.
The Dow Jones transportation index, home to many of these companies, fell 41.56 points, or 1.5 percent, to 1,489.26.
Still, Ken Tower, director of technical trading at UST Securities, told CNN's Street Sweep that the market's overall losses represent a buying opportunities.
And David Elias, chief investment officer at Elias Asset Management, told CNNfn's Market Call that the current consolidation in stocks is just a break before a year-end rally. (408K WAV) (408K AIFF). 
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