Wall Street gears up for earnings

NEW YORK (CNNMoney.com) -- The Dow dipped and the Nasdaq gained Monday as investors played it cautious after last week's rally and ahead of the start of the quarterly earnings reporting period later this week.

Trading volume was pretty light and the treasury bond market was closed due to the Columbus Day holiday.

The Dow Jones industrial average (Charts) lost 0.2 percent. On Friday, the Dow hit an all-time intraday high before ending just short of a new record close.

The broader S&P 500 (Charts) index lost 0.3 percent after hitting record intraday and closing highs on Friday.

The tech-heavy Nasdaq composite (Charts) gained a few points, closing at a fresh 6-1/2 year high.

Oil prices slumped more than $2 and the dollar recovered versus other major currencies.

After the close of trade, Sprint Nextel said its CEO Gary Forsee was stepping down, effective immediately. (Full story).

The minutes from the last Fed meeting will be released Tuesday afternoon, while speeches are expected from St. Louis Fed President William Poole and San Francisco Fed president Janet Yellen.

Poole is a voting member of the 2007 FOMC, while Yellen is not.

Stocks had risen Friday after a strong jobs report raised bets that the economy will be able to avoid a recession, despite the impact of the housing and mortgage market meltdown.

But stocks slipped a bit Monday, with the focus on the start of the third-quarter earnings reporting period. A pair of Dow components are set to get the ball rolling this week, with Alcoa (Charts, Fortune 500) on Tuesday and GE (Charts, Fortune 500) on Friday. However, a bigger batch of reports doesn't arrive until the following week.

"It's a semi-holiday, with the bond market being closed, and investors are feeling a bit cautious ahead of the earnings, so we're seeing some weakness today," said Peter Cardillo, chief market economist at Avalon Partners.

Trucking company Ryder Systems (Charts, Fortune 500) warned that third-quarter earnings won't meet estimates, due to the impact from the economic slowdown. (Full story)

That sent a variety of trucking and other transportation stocks lower, with the Dow Jones Transportation (Charts) average falling 1.2 percent.

In merger news, SAP (Charts) has agreed to buy fellow business software maker Business Objects (Charts) for $6.8 billion in cash.

Textron (Charts, Fortune 500) said it was buying United Industrial (Charts), a maker of aerospace and defense systems, for $1.1 billion in cash.

Merrill Lynch (Charts, Fortune 500) slumped on a pair of analyst downgrades, according to Briefing.com. Last Friday, the company warned it would post a quarterly loss and take a big charge due to the credit and mortgage market turmoil.

The cost of the subprime crisis is estimated to have already reached nearly $20 billion. (Full story).

JP Morgan Chase (Charts, Fortune 500) and Bank of America (Charts, Fortune 500) are likely to report around $3.1 billion in losses for the same reason, according to a Financial Times report that cited an analyst at Sanford Bernstein.

On the upside, Sprint Nextel (Charts, Fortune 500) agreed to settle a patent lawsuit against Internet phone provider Vonage (Charts) for about $80 million. Sprint shares dipped and Vonage shares surged 123 percent and topped the New York Stock Exchange's most-actives list.

Sunoco (Charts, Fortune 500) and Valero Energy (Charts, Fortune 500) surged after Citi Investment Research upgraded the two oil services firms to "buy" from "hold."

On the New York Stock Exchange, losers topped winners almost two to one on volume of nearly 850 million shares. On the Nasdaq, decliners beat advancers four to three on volume of 1.52 billion shares.

The Treasury bond market was closed Monday due to the holiday.

U.S. light crude for November delivery fell $2.20 to settle at $79.02 a barrel on the New York Mercantile Exchange.

In currency trading, the dollar rose against other major currencies.

The rising dollar sent gold and other dollar-traded commodities lower. COMEX gold for December delivery fell $8.50 to settle at $738.70 an ounce.