Post-rally, stocks lose steam

NEW YORK (CNNMoney.com) -- Stocks edged lower Monday morning as investors eyed lower oil prices, a merger in the satellite radio industry and earnings from Dow retailers Wal-Mart Stores and Home Depot.

The Dow Jones industrial average (down 37.41 to 12,730.16, Charts) slipped 0.3 percent around two hours into the session after ending last week at a record high.

The broader S&P 500 (down 2.50 to 1,453.04, Charts) index gave back a few points after hitting a 6-1/2 year high last week. The tech-fueled Nasdaq (down 4.51 to 2,491.80, Charts) composite lost 0.2 percent.

The major gauges rallied last week though stocks lost some steam Friday ahead of the long holiday weekend. Financial markets were closed Monday for Presidents Day.

Tuesday started off on a negative note, despite a slide in oil prices. U.S. light crude oil for March delivery tumbled $1.94 to $57.45 a barrel on the New York Mercantile Exchange.

In deal news, Sirius Satellite Radio (up $0.28 to $3.98, Charts) and XM Satellite Radio (up $1.72 to $15.70, Charts) announced a merger of equals Monday that would value the combined company at roughly $13 billion. (Full story).

Sirius shares jumped 7 percent and XM Satellite shares gained 14 percent but still there was some doubt about whether regulators would approve the deal. (Full story).

Additionally, Vulcan Materials (down $1.27 to $110.54, Charts), which makes highway construction products, said Tuesday it would buy Florida Rock Industries (up $19.48 to $66.44, Charts) in a $4.6 billion cash and stock deal.

In other news, Home Depot (down $0.34 to $41.10, Charts) reported lower quarterly earnings that missed estimates Tuesday. Shares lost less than 1 percent.

Wal-Mart Stores (up $1.18 to $49.66, Charts) reported higher quarterly earnings that topped forecasts on sales that missed estimates. The retailer also issued upbeat current-quarter forecasts. Shares gained 2 percent.

JetBlue (down $0.77 to $12.79, Charts) shares slumped 6 percent after the air carrier's CEO announced an overhaul - after last week's operational fiasco caused by bad weather - that could cost the company $30 million or more.

Additionally, Morgan Stanley downgraded the stock, Reuters reported.

Market breadth was negative. On the New York Stock Exchange, losers beat winners by almost three to two on volume of 380 million shares. On the Nasdaq, decliners topped advancers five to four on volume of 800 million shares.

Treasury prices inched lower, raising the yield on the benchmark 10-year note to 4.69 percent from 4.68 percent late Friday. Treasury prices and yields move in opposite directions.

In currency trading, the dollar gained versus the euro and the yen.

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