NEW YORK (CNN/Money) - U.S. stocks fell Monday, led by declines in technology, as profit takers swooped in following an earnings warning from printer maker Lexmark International and weak results from Merck.

After the close of trade, Texas Instruments (TXN: down $0.81 to $17.88, Research, Estimates), the leading maker of chips for cell phones, reported earnings of 7 cents per share, a penny better than expected and up from a year earlier. The stock gained one percent in after-hours trade.

Also after the close, chipmaker Altera (ALTR: down $0.35 to $18.45, Research, Estimates) reported earnings of 9 cents a share, in line with estimates and up from a year earlier, while semiconductor-equipment maker Novellus (NVLS: down $1.15 to $34.55, Research, Estimates) reported a profit of 5 cents per share, in line with estimates but down from 8 cents a year earlier.

With no new economic reports expected until Thursday, earnings will continue to dominate trade Tuesday and Wednesday.

Before the bell Tuesday, Ameritrade (AMTD: down $0.08 to $8.25, Research, Estimates) reports. The online broker is forecast to have earned 10 cents per share, up from 3 cents a year earlier. Also due before the bell: earnings from Colgate-Palmolive (CL: unchanged at $56.30, Research, Estimates), RadioShack (RSH: down $0.64 to $26.01, Research, Estimates) and UPS (UPS: up $0.42 to $64.79, Research, Estimates), among others.

But the day's biggest earnings are due after the close, when Amazon.com and Sun Microsystems report.

Amazon.com (AMZN: up $0.35 to $35.33, Research, Estimates) is expected to have earned 6 cents per share after losing a penny a share a year earlier. Sun Microsystems (SUNW: down $0.03 to $4.56, Research, Estimates) is expected to have earned 2 cents per share, up from a penny a year earlier.

All three major indexes closed lower, with the Nasdaq composite (down 27.09 to 1681.41, Charts) losing around 1.6 percent, the Standard & Poor's 500 (down 14.52 to 978.80, Charts) index losing around 1.5 percent, and the Dow Jones industrial average (down 91.46 to 9096.69, Charts) losing around 1 percent.

Although the selling extended to a variety of blue chips -- with 26 out of 30 Dow stocks closing lower -- technology selling dominated, with investors cashing out of some of the stocks that have led Wall Street's four-month rally.

The period of reporting second-quarter earnings is well under way. About a third of the S&P 500 companies have already reported results and another third are due by the end of this week, and Wall Street's focus is likely to remain on the quality of the bottom-line readings that are released. The results revealed so far have been largely better than expected and have caused analysts to raise their earnings growth forecasts for the third and fourth quarters.

Stocks have rallied for more than four months on the belief that the economy will improve in the second half of the year. Although a bet on higher earnings would seem to support the recovery theory, the market has struggled in the past few weeks and on Monday after the day's batch of earnings reports turned out to be mixed.

"Lexmark was bad, 3M was good, and in general you've had that today, with the mix of earnings sort of canceling each other out," said Tom Schrader, head of listed trading at Legg Mason. "I think people are using this as a reason to take profits, particularly after the tremendous run we've had, and I don't think that's a bad thing."

Investors may have already priced in the strong earnings and therefore may be unwilling to continue jumping in with the same gusto as in the past few months, now that the reporting period is finally here. The seasonal factors also can't be ignored, Schrader said, noting the historically weak trends for July, August and September. Schrader thinks investors will likely find reasons to continue to take profits over the next few weeks.

Lexmark International (LXK: down $14.10 to $59.40, Research, Estimates) tumbled 19.2 percent in active NYSE trade after the printer maker reported earnings that rose from a year earlier but missed estimates. The company also warned that third-quarter results will miss current expectations and that it remains cautious because of continued sluggishness in corporate and consumer spending.

The stock's slide took its toll on competitors like Hewlett-Packard (HPQ: down $0.72 to $21.83, Research, Estimates) and others in the hardware sector. The Goldman Sachs Hardware (Charts) index fell 3 percent.

On the Nasdaq, big-cap tech leaders led the declines, including Intel (INTC: down $0.60 to $24.06, Research, Estimates), which lost 2.4 percent, and Microsoft (MSFT: down $0.85 to $26.04, Research, Estimates), which lost 3.2 percent.

Dow 30 company Merck (MRK: down $1.95 to $59.82, Research, Estimates) reported second-quarter earnings that missed analysts' forecasts by a penny a share even as they rose from a year ago, due to the impact of the weak dollar and some growth in prescription drug sales. Merck's stock fell 3.2 percent.

Motorola (MOT: down $0.33 to $8.72, Research, Estimates) lost 3.7 percent after Credit Suisse First Boston downgraded it to "underperform" from "neutral," saying the company will likely have a hard time as it attempts to increase its market share in the handset market and that current consensus revenue and earnings-per-share forecasts are too high.

In addition, shares of SBC Communications (SBC: down $1.05 to $23.13, Research, Estimates), a Dow stock, fell 4.3 percent after the telecom said it would put $500 million into EchoStar (DISH: up $0.67 to $36.00, Research, Estimates) as part of a deal that would see SBC selling EchoStar's satellite TV services.

One exception to the negativity was Dow member 3M (MMM: up $6.17 to $136.35, Research, Estimates), which reported better-than-expected results that rose from a year ago, thanks to the weakness of the dollar and cost-cutting moves. The company also raised its full-year earnings-per-share forecast and the result was a 4.7 percent gain in the stock.

With the earnings season in full swing, economic reports have claimed less focus lately. The day's report -- the June reading on leading economic indicators -- showed an expected 0.1 percent rise, its third monthly increase in a row.

Almost three stocks fell for every one that rose on the New York Stock Exchange, where 1.20 billion shares traded, while winners beat losers almost two to one on the Nasdaq, where volume stood at 1.43 billion shares.

Treasury bond prices were lower, with the 5-year note yield at 3.05 percent. The dollar slipped against the euro and the yen.

NYMEX light sweet crude oil futures fell 20 cents to $30.83 a barrel.