Stocks finish lower
Markets churn on auto sales, surging oil and Obama stimulus. Dow ends below 9,000.
NEW YORK (CNNMoney.com) -- Stocks fell Monday, retreating after last week's big rally, as investors digested President-elect Barack Obama's stimulus plan, monthly auto sales and surging oil prices.
The Dow Jones industrial average (INDU) lost 0.9%. The Standard & Poor's 500 (SPX) index shed 0.5% and the Nasdaq composite (COMP) slid 0.3%.
Even with some losses Monday, "the market has a better tone to it," said Donald Selkin, chief market strategist at National Securities. He noted that while the major gauges are lower, the broader market is higher, with winners topping losers on the New York Stock Exchange. On the Nasdaq, winners and losers were roughly even.
Stocks rallied Friday, with the Dow closing above 9,000 for the first time in two months, as investors pulled money out of bonds and put it to work in beaten-down equities.
Stocks are coming off a classic end-of-year "Santa Claus" rally. According to the Stock Trader's Almanac, a combination of the last five trading days of the previous year and the first two of the next, have yielded an average return of 1.5% for the S&P 500 since 1950. The S&P 500 gained 7.4% during that period in 2008-2009.
"On Friday, we had the best first-day-of-the-year rally since 2003, and that year was a comeback year after a terrible bear market," Selkin said. "We could see something similar this year, although I think any gains will be smaller."
In 2003, stocks bounced back from a three-year bear market, with the S&P 500 gaining 26%.
On Tuesday, the Institute for Supply Management releases its survey of the services sector of the economy. The December index is expected to have dipped to 37.0 from 37.3 in November, remaining deep in recessionary territory.
The government's November factory orders report is due around the same time. Orders are expected to have fallen 2.6% after having fallen 5.1% in October.
The November pending home sales index is also due in the morning, while the afternoon brings the release of the minutes from the last Federal Reserve monetary policy meeting in December.
Stimulus plan: President-elect Obama began his push on Capitol Hill Monday for his economic stimulus plan. The plan will include $300 billion in tax cuts for businesses and individuals, and provisions for renewable-energy production and road and school construction.
Also Monday, a House panel held a hearing on the Bernard Madoff scandal, which cost investors an estimated $50 billion.
Economy: November construction spending held up better than had been expected. Spending fell 0.6% versus forecasts for a drop of 1.4%. Spending fell 0.4% in the previous month.
Auto sales: The nation's automakers reported December sales results during the session. Ford Motor (F, Fortune 500) said sales fell 32% in the month, a slightly narrower loss than what analysts had been expecting. General Motors (GM, Fortune 500) said sales fell 31% in December, also slightly narrower than what analysts had forecast.
Toyota reported that sales fell 37% in the month, while Chrysler reported sales fell 53%.
Company news: The Macworld conference for Apple (AAPL, Fortune 500) developers got underway in San Francisco, with Apple expected to unveil new products. Ahead of the presentation, CEO Steve Jobs said his recent weight loss has been traced to a hormone imbalance for which he is being treated. Jobs said that he will stay on the job as he recovers.
Pfizer (PFE, Fortune 500) said it is open to buying rivals as a means of growing revenue, according to a Financial Times report Monday.
AT&T (T, Fortune 500) and Verizon Communications (VZ, Fortune 500) both slipped after Bernstein downgraded the two telecoms, according to Briefing.com.
Market breadth was mixed. On the New York Stock Exchange, winners topped losers three to two on volume of 1.32 billion shares. On the Nasdaq, advancers beat decliners by five to four on volume of 1.83 billion shares.
Bonds: Treasury prices tumbled, raising the corresponding yield on the benchmark 10-year note to 2.47% from 2.37% Friday. Treasury prices and yields move in opposite direction. Yields on the 2-year, 10-year and 30-year Treasurys all hit record lows last month.
Lending rates were mixed. The 3-month Libor rate rose to 1.42% from 1.41% Friday, a 4-1/2-year low. Overnight Libor held steady at 0.12%. Libor is a key bank lending rate.
Other markets: In global trading, Asian and European markets rallied.
The dollar gained versus the euro and yen.
U.S. light crude oil for February delivery rose $2.47 to settle at $48.81 a barrel on the New York Mercantile Exchange.
COMEX gold for February delivery fell $21.70 to settle at $857.80 an ounce.
Gasoline prices rose 1.4 cents to a national average of $1.672 a gallon, according to a survey of credit-card swipes released Monday by motorist group AAA. 
