The major indexes opened higher, then gave back most of their gains, as investors nervously eyed rising Treasury yields and crude futures, according to Robert Pavlik, chief investment officer at Oaktree Asset Management.
Analysts said the market could be in for some rather tepid price action, following recent dramatic price swings.
"Stocks continue to plow through any news that comes their way - neither good nor bad will keep prices down for long," said Paul Nolte, director of investments at Hinsdale Associates.
The Dow Jones Industrial Average was down about 18 points at 13,620, while the S&P 500 fell 2 points to 1,530.
The Nasdaq Composite dropped almost 4 points to 2,623.
Breadth was negative with 8 rising shares for every 7 on the decline on the New York Stock Exchange, and 15 rising stocks for every 11 losing strength in the Nasdaq markets.
Among blue chips, Alcoa rose 2.1%, after a report in The Times (of London) newspaper said BHP Billiton Ltd. is reviewing plans to buy the aluminum producer.
Wal-Mart Stores Inc. rose 0.1%. The giant retailer has asked a state court in Michigan to dismiss the lawsuit filed by fired advertising executive Julie Roehm, contending that she lives in Arkansas.
Boeing was in focus as the Paris Air Show began. Airbus won orders from Middle Eastern airlines Qatar Airways and Emirates as well as US Airways , while Boeing inked two smaller deals. But the stock was down 0.6% at $97.63 as investors also absorbed news of contracts for its rival Airbus .
Among technology shares, Google Inc. was in focus. Ebay Inc. said it expects to keep adds off Google's search engine for about a week, as it tests how effectively the ads drive visitors to its auction site and produce sales.
Google shares rose 1.7% to $514.51 a share.
Shares of Bear Stearns were 2.2% lower at $146.78. The Wall Street Journal reported that a group of hedge fund managers at the firm are trying to line up new investors or lenders to keep the fund going. The fund is invested in a number of assets linked to the troubled subprime mortgage sector.
Yields on back burner?
Stocks rallied last week, as investors cheered economic data pointing to tame inflation, which helped to contain a surge in bond yields. Higher bond yields provide an attractive alternative to riskier bets in the stock market, while also lifting borrowing costs for businesses and consumers.
Treausry opened higher, then gave up their gains, ahead of data which might point to further weakness in housing. The benchmark 10-year Treasury bond was down 1/32 at 94-28/32, while its yield rose to 5.182% from 5.17% at Friday's close.
The July crude futures contract turned higher in midmorning, adding to the pressure on stocks. The contract last was up 0.6% at $6841 a barrel, pressured by worries about a threatened strike by Nigerian oil workers.
The BBC is reporting that militants are holding an oil station in Nigeria's Delta region.
Gold was rising too, as the August futures contract rose 0.3% to $660.50 an ounce.
After being eclipsed by rising bond yields in recent weeks, deal-making returned as a catalyst for the market.
Yields and deals, meanwhile, are not unrelated.
"The enthusiasm for lower rates has less to do with the odds of a rate cut, and much more to do with 'borrowing costs'," said Marc Pado, chief market strategist at Cantor Fitzgerald, in a note. "This bull market has been fueled by M & A activity. The fear is that higher rates might choke off borrowing and stem the tide of stock being taken private."
In other deal-making news Monday, shareof Dow Jones & Co. , publisher of this report, fell 0.2%. General Electric Co. and the publisher of the Financial Times, Pearson PLC, are in talks about making a joint bid for the publishing company, according to the Wall Street Journal.
Such a bid would rival the $60-a-share, or $5 billion proposal for Dow Jones made by News Corp. .
Elsewhere, Nymex Holdings fell 1.6% after the Chicago Mercantile Holdings said it's not in talks to buy the New York commodities exchange.
By Nick Godt