NEW YORK (CNN/Money) - Stocks ended lower Monday, as profit taking after last week's gains, exacerbated by light volume, gripped the market.

The Dow Jones industrial average (down 31.23 to 9317.64, Charts) clocked modest losses, dipping 0.3 percent. The Nasdaq composite (down 1.01 to 1764.31, Charts) lost about a point, and the Standard & Poor's 500 index (up 0.65 to 993.71, Charts) gained less than a point.

"I think the market has gotten tired ... and poor attendance is also contributing to a very quiet market today," said Tim Heekin, head of stock trading at Thomas Weisel Partners. "I think this is short-term, but I think the path of least resistance is down."

The week, which will be heavy on economic news, is also likely to be light on trading volume as many Wall Streeters enjoy time off ahead of the Labor Day holiday next Monday. Volume was very light Monday, with only 948 million shares trading on the New York Stock Exchange and 1.1 billion shares trading on the Nasdaq. Three stocks fell for every two that rose on both exchanges.

Investors also were cautious after reports that bombings in India's financial capital, Mumbai, formerly known as Bombay, killed at least 46 people and injured more than 100. (For more, see CNN.com.) Meanwhile, a better-than-expected reading on home sales did little to inspire investors.

Investors will have more economic data to consider Tuesday. The government is set to report its July reading on durable goods orders ahead of the opening bell. Economists expect orders rose 1 percent in July after a jump of 2.3 percent in the previous month, according to a survey by Briefing.com.

Also likely to garner attention is the Conference Board's report on consumer sentiment, due shortly after the start of trading. The index is forecast, on average, to rise to 79.6 in August from 76.6 in July.

At the same time, investors will get another dose housing market statistics. Economists expect that new home sales in July came in at an annual rate of 1.15 million down from 1.16 million in June.

A surprisingly strong report on existing home sales in July wasn't enough to counter profit taking, as some looked at the report as a lagging indicator. Existing home sales jumped a solid 5 percent to a record annual rate of 6.12 million, well above the 5.9 million rate that had been expected by economists and much higher than the 5.83 million rate in June.

The news, confirming that the housing market remained robust even as mortgage rates shot up last month, failed to stir stock investors.

Traders contend that investors need strong evidence of increasing business spending and falling unemployment in order to jump back into stocks with both feet. Stocks rallied in the second quarter as investor anticipated a better second half of 2003. But the advance stalled as the markets entered the traditionally slow summer months.

Last week, however, saw the Dow reach a new 14-month high, while the Nasdaq hit its highest level in 16 months, which traders said indicates investors' underlying optimism.

"People are getting more optimistic that we have seen the bottoming of the economy," said Bill Roe, portfolio manager at Melhado, Flynn & Associates.

But in the first session of a traditionally slow trading week heading into a holiday weekend, some investors chose to focus on corporate news and individual stocks.

After rallying Friday, Intel (INTC: down $0.15 to $27.24, Research, Estimates) tipped about 0.6 percent lower despite news that several brokerage houses raised their price targets on the stock. The top chipmaker soared Friday after raising its forecast for sales and gross margins, but CEO Craig Barrett cautioned Monday that it was too early to call a turnaround in the chip industry.

Elsewhere in the market, Wal-Mart (WMT: up $0.70 to $59.10, Research, Estimates) rose 1.1 percent after the retailer raised its August target for sales growth at stores open at least a year to 4 to 6 percent from 3 to 5 percent.

Fellow Dow component Alcoa (AA: down $0.34 to $27.79, Research, Estimates) slid 1.2 percent after its stock's hefty climb since March caused Prudential to downgrade the shares to "hold" from "buy" based on valuation.

Caterpillar (CAT: down $2.03 to $69.66, Research, Estimates) also weighed on the Dow, slipping nearly 2.9 percent after Legg Mason downgraded the construction vehicle maker to "hold" from "buy," also citing valuation.

The wireless sector came under pressure after Wachovia downgraded Sprint PCS (PCS: down $0.16 to $5.00, Research, Estimates), Alltel (AT: down $1.09 to $44.87, Research, Estimates) and Triton PCS (TPC: down $0.30 to $5.50, Research, Estimates) to "market perform" from "outperform" in a research note dated Aug. 22, citing concerns about industry growth prospects, according to Reuters. Sprint PCS dipped 3.1 percent, Alltel slid 2.4 percent and Triton PCS lost 5.2 percent.

And long-suffering Lucent Technologies (LU: down $0.02 to $1.82, Research, Estimates) lost 1.1 percent after news late Friday that the Justice Department and the Securities and Exchange Commission have begun investigations into its operations in Saudi Arabia, looking for possible violations of the Foreign Corrupt Practices Act. The news came a week after a Saudi telecom firm sued Lucent, alleging it bribed top officials in the Middle Eastern country to secure a lucrative contract.

European markets closed the day mostly lower Monday. London markets were closed for a holiday. Stocks ended mixed in Asia.

Just before 5 p.m. ET, Treasury bond prices slipped, with the yield on the 10-year note rising to 4.53 percent from 4.47 percent late Friday. Bond prices and yields move in opposite directions. The dollar edged lower against the euro and dropped to a one-month low against the yen.

COMEX gold fell $1.90 to $362.40 an ounce. NYMEX light sweet crude oil futures fell 28 cents to $31.56 a barrel.