Blue chips on record run

NEW YORK (CNNMoney.com) -- The Dow Jones industrial average finished in record territory for the third straight session Monday, as the broader market struggled ahead of the week's earnings figures and inflation reports.

The Dow (up 43.73 to 13,950.98, Charts) added 0.3 percent to close 50 points shy of 14,000, after touching a new intraday high of 13,989.11 midway through the session. In the previous session the blue-chip index climbed above 13,900 for the first time ever. And on Thursday the Dow closed above 13,800 for the first time.

Year-to-date, the Dow is up 12 percent and has notched 30 record closes so far.

The tech heavy Nasdaq composite index (down 9.67 to 2,697.33, Charts) lost over 0.3 percent and the broader Standard & Poor's 500 index (down 2.98 to 1,549.52, Charts) fell 0.2 percent, but reached a record trading high of 1,555.90 during the session.

All three major gauges were higher earlier in the day, as traders focused on talk of a possible deal with Verizon. But nervousness set in by afternoon trading ahead of a string of corporate earnings reports, inflation numbers and testimony from Federal Reserve Chairman Ben Bernanke, according to Hugh Johnson, chairman of asset management company Johnson Illington Advisors.

On top of which, "the price of oil adds a little bit of spice," he added.

"There's a real chance there will be some excitement this week," Johnson said.

On the merger front, British mobile phone group Vodafone is considering a $160 billion takeover bid for Verizon Communications (up $1.00 to $42.76, Charts, Fortune 500), according to a report in the online edition of the Financial Times. Despite Vodafone's denial, shares of Dow component Verizon rose 2.4 percent.

Of the 30 stocks in the Dow, 18 rose and 12 fell.

Pancake house operator IHOP (up $4.99 to $61.24, Charts) said it agreed to buy fellow restaurant operator Applebee's International (up $0.53 to $24.91, Charts) for about $2.1 billion, sending shares of both companies higher.

News that a unit of private equity giant Blackstone Group will buy knee and ankle brace maker DJO for $1.3 billion sent shares of DJO (up $8.00 to $50.10, Charts) up 19 percent.

Auto supplier Lear (up $0.60 to $37.50, Charts, Fortune 500) said its shareholders rejected a $2.9 billion buyout offer from a firm led by billionaire investor Carl Icahn.

And Ford (down $0.11 to $8.86, Charts, Fortune 500) said it is not in negotiations to sell its Volvo unit after reports over the weekend said the automaker had decided to put the Swedish unit up for sale.

In other corporate news, Moody's Investors Service lowered its outlook on Toll Brothers (up $0.12 to $26.56, Charts, Fortune 500) to negative from stable, fueling subprime mortgage woes.

McDonald's (up $0.19 to $52.10, Charts, Fortune 500) rose slightly after the hamburger chain said it expects earnings to be above Wall Street estimates.

Shares of Blue Nile (up $6.60 to $78.56, Charts) jumped 9 percent after a Citigroup analyst upgraded the online jewelry retailer to "buy" from "hold."

Syntax-Brillian (up $1.05 to $6.61, Charts) also soared 19 percent after the TV maker raised its revenue outlook for the year, citing strong demand for its high-definition televisions.

In earnings news, shares of Mattel (up $0.67 to $27.20, Charts, Fortune 500) climbed 2.5 percent after the toy maker posted earnings in line with expectations.

Eaton (up $2.77 to $100.87, Charts, Fortune 500) posted better-than-expected quarterly earnings, sending shares up nearly 3 percent.

And after the closing bell, Universal Forest (down $0.41 to $43.99, Charts) sank 6 percent on Inet after the wood production company reported earnings that were below expectations.

Later on in the week, tech giants Microsoft (Charts, Fortune 500) and Intel (Charts, Fortune 500) are due to report. Financial firms Merrill Lynch (Charts, Fortune 500), Citigroup (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) are also slated for later in the week.

Market breadth was negative. Losers edged out winners on the New York Stock Exchange by a margin of two to one on volume of 1.4 billion shares. Decliners beat gainers by nearly two to one on the Nasdaq on volume of 1.8 billion shares.

A number of key economic readings are also due out this week including readings on inflation, both at the wholesale and consumer level, and housing starts which is due out Wednesday.

Treasury prices rose, lowering the yield on the benchmark 10-year note to 5.04 percent from around 5.09 percent late Friday.

The dollar held near record lows against the euro and remained steady versus the yen ahead of Bernanke's testimony before Congress on Wednesday.

Oil prices edged higher. U.S. light crude for August delivery added 22 cents to $74.15 a barrel on the New York Mercantile Exchange.

COMEX gold for August delivery slipped $1 to $666.30 an ounce.