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NEW YORK: Wall Street stocks fell modestly on Monday as investors consolidated gains from the past week's rally and mulled Bank of America's better-than-expected earnings.
The Dow Jones Industrial Average closed down 29.23 points (0.25 percent) at 11,467.34 and the Nasdaq composite fell 3.25 points (0.14 percent) to 2,279.53.
The broad-market Standard & Poor's 500 index drifted down a fractional 0.68 points (0.05 percent) to finish at 1,260.00.
The market opened stronger but failed to sustain its gains as Bank of America announced a second-quarter profit of 3.41 billion dollars - down 41 percent from a year ago amid fresh write-downs from real estate but well above expectations.
Sentiment was hurt by a rebound in oil prices, after steep falls last week. New York's main contract, light sweet crude for August delivery, advanced 2.16 dollars to close at 131.04 dollars a barrel.
Still, many analysts said the stock market may have seen the worst of its declines.
"Stocks have made a bottom, but we are skeptical that it is the bottom," said market strategist Rod Smyth at Riverfront Investment Group.
"Nevertheless, we expect the S&P 500 to rise over the coming weeks as the extreme bearish sentiment of the last few weeks is unwound."
Barry Ritholtz at Ritholtz Research kept a cautious posture, saying last week represented a huge move by short-sellers, those betting on a market decline, to cover their positions, forcing shares higher.
"Earnings are coming in weak - however, they are not as bad as the worst-case scenarios," he said.
"As we noted previous to the rally, we covered our shorts and are playing this for (a) bounce. But beyond the bounce, we continue to have concerns."
Among stocks in focus, Bank of America gave back some of its early gains but ended 3.9 percent higher at 28.56 dollars after its better-than-expected earnings. Elsewhere in the sector, Citigroup added 1.7 percent to 19.69 and Lehman Brothers fell 4.1 percent to 18.32.
Troubled mortgage finance firms Fannie Mae and Freddie Mac were mixed after last week's near meltdown. Fannie rallied 5.45 percent to 14.13 dollars and Freddie fell 4.75 percent to 8.75 dollars.
Elsewhere, biotech drugs maker Genentech climbed 14.7 percent to 93.88 on news that Swiss-based Roche offered to buy the remaining shares it does not own in the US firm.
Yahoo fell 3.5 percent to 21.67 dollars after the Internet giant struck a deal with corporate raider Carl Icahn, giving the billionaire a seat on the board and averting a potentially nasty proxy fight.
Microsoft, which has been in talks on and off to buy Yahoo, shed 0.85 percent to 25.64 dollars.
Bonds firmed, with the yield on the 10-year US Treasury bond falling to 4.067 percent from 4.081 percent on Friday and that on the 30-year bond easing to 4.648 percent against 4.662 percent. Bond yields and prices move in opposite directions. - AFP/de
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