Stocks surge, retreat
Major gauges give up gains as investors welcome cash from central banks, solid retail sales, but hold back nonetheless.
NEW YORK (CNNMoney.com) -- Stocks ended little changed Monday, giving up earlier gains, as investors showed relief that central banks around the world are addressing credit crunch worries, but remained wary amid lingering concerns about the economy.
The Dow Jones industrial average (down 3.01 to 13,236.53, Charts) lost a few points, after jumping as much as 100 earlier in the session. The broader S&P 500 (down 0.72 to 1,452.92, Charts) index ended little changed and the tech-fueled Nasdaq Composite (down 2.65 to 2,542.24, Charts) index edged down.
All three major gauges rose in the morning and swayed on both sides of the break-even line in the afternoon, before losing steam near the close.
Treasury prices rose, lowering corresponding yields. The dollar rose versus the euro and slipped versus the yen. Oil prices ended modestly higher.
Tuesday morning brings reports on the July producer price index and the nation's trade balance, as well as quarterly results from Dow components, Home Depot (down $0.68 to $35.24, Charts, Fortune 500) and Wal-Mart Stores (up $0.10 to $46.17, Charts, Fortune 500).
Stocks have been whipsawed the last few months on fears about tightening credit after a period of widespread liquidity. At the same time, investors have been absorbing the impact of the slumping housing market, including the collapse of the subprime mortgage market - loans made to consumers with less than ideal credit.
Last Thursday concerns about these developments accelerated, sending stocks tumbling - and the Dow industrials to their second worst one-day point and percentage loss of the year.
Friday started off on a bad note too, but investors managed to recover most of the day's losses by the close. That recovery continued through most of Monday, but hit some resistance near the close, as investors turned the focus to economic and earnings news due later in the week.
Monday's choppy trading also reflected that it's late summer on Wall Street and the news flow is slower than usual.
"We're going to see this kind of volatility for the next few weeks," said Dan Genter, president and CEO at RNC Genter Capital Management. "We're basically through the earnings period, we're in a no-news period and it's compounded by the fact that a lot of people are still on vacation."
Genter said the market will likely show more consistency starting after Labor Day.
On the upside, at least the "raw fear" of last week seems to have dissipated, thanks to the infusions of money from central banks around the world, said John Wilson, chief technical strategist at Morgan Keegan. "It's kind of like the relief you feel when someone has been hitting you in the head and then they stop."
The European Central Bank (ECB) added another $65 billion to the monetary system, building on last week's series of cash infusions. The Bank of Japan (BOJ) also added $5 billion, building on last week's moves.
Plus, just as the market opened, the Federal Reserve injected an additional $2 billion in reserves to the nation's banking system after pumping $38 billion in Friday.
Also helping with sentiment: news out of Goldman Sachs (down $3.00 to $177.50, Charts, Fortune 500) that one of its troubled hedge funds is getting a $3 billion cash infusion from a team of investors.
And July retail sales beat expectations. Sales rose 0.3 percent in the month, above forecasts for a rise of 0.2 percent. Sales excluding autos rose 0.4 percent, meeting expectations. A separate report showed June business inventories rose 0.4 percent, as expected.
Despite a strong start to the session, the market turned mixed as the day wore on, with weakness in gold, silver, homebuilders, banks and airlines tempering strength in technology, telecom, retail and automakers.
In addition, a variety of small cap stocks declined, dragging down the Russell 2000 small-cap index by 1.1 percent.
Qualcomm (up $1.03 to $38.92, Charts, Fortune 500) shares rose 2.7 percent after the wireless chipmaker's general counsel resigned amid ongoing legal battles with Broadcom (down $0.81 to $35.04, Charts) and other rivals.
Additionally, a number of stocks that got battered at the end of last week bounced back, including Dow components Alcoa (up $0.85 to $35.54, Charts, Fortune 500), Boeing (up $1.61 to $100.05, Charts, Fortune 500) and General Motors (up $0.61 to $34.46, Charts, Fortune 500).
Hewlett-Packard (up $1.22 to $48.43, Charts, Fortune 500), Dell (up $0.25 to $26.70, Charts, Fortune 500), Apple (up $2.79 to $127.79, Charts, Fortune 500) and Yahoo (up $0.63 to $24.57, Charts, Fortune 500) were among the tech stocks bouncing back.
Market breadth was negative. On the New York Stock Exchange, losers beat winners by a narrow margin on volume of 1.72 billion shares. On the Nasdaq, decliners topped advancers by 8 to 7 on volume of 2.22 billion shares.
Treasury prices rose, lowering the benchmark 10-year note yield to 4.76 percent from 4.80 percent late Friday. Treasury prices and yields move in opposite directions.
In currency trading, the dollar rose versus the euro and slipped versus the yen.
U.S. light crude oil for September delivery rose 15 cents to settle at $71.62 a barrel on the New York Mercantile Exchange, giving up bigger morning gains.